The effect of import competition on labor income inequality through firm and worker heterogeneity in the Japanese manufacturing sector |
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Affiliation: | 1. Department of Economics, Nazarbayev University, Astana 010000, Kazakhstan;2. Department of Economics, University of Liverpool Management School, Chatham St, Liverpool L69 7ZH, UK;3. Department of Economics, University of Leuven, Leuven 3000, Belgium |
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Abstract: | This study estimates the effects of import competition from Asia on the labor income inequality of Japanese manufacturing workers, considering firm and worker heterogeneity. Parameters are obtained from regression results of annual salary by using constructed worker–establishment panel data. The estimated salary change is positively and negatively larger for higher- and lower-paid workers, respectively, implying that labor income inequality among industry–size–skill–gender groups has increased due to imports from Asia. However, the actual evolution of income inequality during 1998–2014 is not successfully explained by Asian imports: other shocks overshadow import competition to determine actual income inequality. |
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Keywords: | Firm size Gender Heterogeneity Import competition Inequality Labor income Skill |
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