Advertisement

Empirical Economics

, Volume 56, Issue 2, pp 551–617 | Cite as

Import penetration and returns to tasks: recent evidence from the Peruvian labour market

  • Elizabeth J. Casabianca
  • Alessia Lo TurcoEmail author
  • Claudia Pigini
Article
  • 138 Downloads

Abstract

This paper provides original evidence on the impact of import penetration on wages of individuals performing manual/cognitive task-intensive jobs in the Peruvian labour market. Matching labour force surveys with task indicators from the us O*Net database and with information on industry- and occupation-specific import exposure, we build a continuous measure of manual intensity to uncover the heterogeneous effect of import penetration on workers’ wages. In order to tackle the endogeneity hampering the consistent estimation of our effects of interest, we combine an identification strategy based on heteroskedasticity with the traditional instrumental variable approach. We find that workers employed in highly cognitive/less manual-intensive jobs in the Peruvian manufacturing sectors are positively affected by industry-specific import penetration. This evidence is confirmed and magnified for the whole economy when the effects of occupation-specific import exposure are addressed.

Keywords

Peru Import penetration Task approach Manual-intensive occupations 

JEL Classification

F16 J24 J31 

Supplementary material

References

  1. Acemoglu D, Autor D (2011) Skills, tasks and technologies: implications for employment and earnings. No. chap. 12 in Handbook of labour economics. Elsevier, AmsterdamGoogle Scholar
  2. Acemoglu D, Autor D, Dorn D, Hanson GH, Price B (2016) Import competition and the great us employment sag of the 2000s. J Labor Econ 34(1):S141–S198Google Scholar
  3. Aedo C, Hentschel J, Moreno M, Luque J (2012) From occupations to embedded skills: a cross-country comparison. Technical report 6560, World BankGoogle Scholar
  4. Amiti M, Davis DR (2011) Trade, firms, and wages. Rev Econ Stud 79:1–36Google Scholar
  5. Amuedo-Dorantes C, de la Rica S (2011) Complements or substitutes? Task specialization by gender and nativity in Spain. Labour Econ 18(5):697–707Google Scholar
  6. Angrist JD, Evans WN (1998) Children and their parents’ labor supply: evidence from exogenous variation in family size. Am Econ Rev 88(3):450–477Google Scholar
  7. Ashournia D, Munch J, Nguyen D (2014) The impact of chinese import penetration on danish firms and workers. Technical report, IZAGoogle Scholar
  8. Attanasio O, Goldberg KP, Pavcnik N (2004) Trade reforms and income inequality in Colombia. J Dev Econ 74:331–366Google Scholar
  9. Autor DH, Dorn D (2013) The growth of low-skill service jobs and the polarization of the US labor market. Am Econ Rev 103(5):1553–1597Google Scholar
  10. Autor DH, Handel MJ (2013) Putting tasks to the test: human capital, job tasks, and wages. J Labor Econ 31(S1):S59–S96Google Scholar
  11. Autor D, Levy F, Murname R (2003) The skill content of recent technological change: an empirical exploration. Q J Econ 118(4):1279–1333Google Scholar
  12. Autor DD, David H, Hanson GH (2013) The china syndrome: local labor market effects of import competition in the United States. Am Econ Rev 103(6):2121–2168Google Scholar
  13. Autor DD, David H, Hanson GH (2014) Trade adjustment worker level evidence. Q J Econ 129(4):1790–1860Google Scholar
  14. Bacolod MP, Blum BS (2010) Two sides of the same coin: U.S. ”residual” inequality and the gender gap. J Hum Resour 45(1):197–242Google Scholar
  15. Baldwin R (2006) Globalisation: the great unbundling(s). Working paper, Geneva Graduate Institute of International StudiesGoogle Scholar
  16. Balli HO, Sorensen BE (2013) Interaction effects in econometrics. Empir Econ 45:583–603Google Scholar
  17. Baumgarten D, Geishecker I, Holger G (2013) Offshoring, tasks, and the skill-wage pattern. Eur Econ Rev 61(C):132–152Google Scholar
  18. Biscourp P, Kramarz F (2007) Employment, skill structure and international trade: firm-level evidence for France. J Int Econ 72(1):22–51Google Scholar
  19. Bloom N, Draca M, Van Reenen J (2015) Trade induced technical change? the impact of Chinese imports on innovation, it and productivity. Rev Econ Stud.  https://doi.org/10.1093/restud/rdv039 Google Scholar
  20. Borjas G (1987) Self-selection and the earnings of immigrants. Am Econ Rev 77(4):531–53Google Scholar
  21. Bronars SG, Grogger J (1994) The economic consequences of unwed motherhood: using twin births as a natural experiment. Am Econ Rev 84(5):1141–1156Google Scholar
  22. CEPLAN (2016) Economa informal en per: Situacin actual y perspectivas. Technical report, Centro Nacional de Planeamento EstrategicoGoogle Scholar
  23. Cisneros-Acevedo C (2016) Trade liberalisation effect in two margins of informality. The peruvian case. Working paper, mimeo University of NottinghamGoogle Scholar
  24. Colantone I, Crinó R (2014) New imported inputs, new domestic products. J Int Econ 92(1):147–165Google Scholar
  25. Currie J, Harrison A (1997) Trade reform and labour market adjustment in Morocco. J Labor Econ 15(3):44–72Google Scholar
  26. Dauth W, Findeisen S, Suedekum J (2014) The rise of the east and the far east: German labor markets and trade integration. J Eur Econ Assoc 12(6):1643–1675Google Scholar
  27. Davis DR (1996) Trade liberalization and income distribution. Working paper 5693, National Bureau of Economic ResearchGoogle Scholar
  28. Duffy J, Papageorgiou C, Perez-Sebastian F (2004) Capital skill complementarity? Evidence from a panel of countries. Rev Econ Stat 86(1):327–344Google Scholar
  29. Ebenstein A, Harrison A, MacMillan M, Phillips S (2014) Estimating the impact of trade and offshoring on American workers using the current population surveys. Rev Econ Stat 96(4):581–595Google Scholar
  30. Fajnzylber P, Fernandes A (2009) International economic activities and skilled labour demand: evidence from Brazil and China. Appl Econ 41(5):563–577Google Scholar
  31. Farré L, Klein R, Vella F (2013) A parametric control function approach to estimating the returns to schooling in the absence of exclusion restrictions: an application to the NLSY. Empir Econ 44:111–133Google Scholar
  32. Feenstra RC (2004) Advanced international trade. Theory and evidence. Princeton University Press, PrincetonGoogle Scholar
  33. Feenstra R, Hanson G (1996) Political economy of trade policy: essays in honor of Jagdish Bhagwati. Chap Foreign investment, outsourcing and relative wages. MIT Press, Boston, pp 89–127Google Scholar
  34. Feenstra R, Hanson G (1997) Foreign direct investment and relative wages: evidende from Maxico’s maquiladoras. J Int Econ 42:371–393Google Scholar
  35. Feenstra R, Hanson G (1999) The impact of outsourcing and high-technology capital on wages: Estimates for the United States, 1979–1990. Q J Econ 114(3):907–940Google Scholar
  36. Feenstra R, Hanson G (2001) Global production sharing and rising inequality: a survey of trade and wages. NBER working papers 8372, National Bureau of Economic ResearchGoogle Scholar
  37. Galarza FB, Yamada G (2014) Labor market discrimination in Lima, Peru: evidence from a field experiment. World Dev 58:83–94Google Scholar
  38. Gallego FA (2012) Skill premium in Chile: studying skill upgrading in the south. World Dev 40(3):594–609Google Scholar
  39. Goldberg PK, Pavcnik N (2004) Trade, inequality, and poverty: what do we know? evidence from recent trade liberalization episodes in developing countries. NBER working papers 10593, National Bureau of Economic ResearchGoogle Scholar
  40. Goldberg PK, Pavcnik N (2007) Distributional effects of globalization in developing countries. J Econ Lit Am Econ Assoc 45(1):39–82Google Scholar
  41. Goos M, Manning A (2007) Lousy and lovely jobs: the rising polarization of work in Britain. Rev Econ Stat 89(1):118–133Google Scholar
  42. Griliches Z (1969) Capital-skill complementarity. Rev Econ Stat 51(4):465–468Google Scholar
  43. Grossman G, Rossi-Hansberg E (2006) Trading tasks: a simple theory of offshoring. NBER working paper 12721, National Bureau of Economic ResearchGoogle Scholar
  44. Handel MJ (2012) Trends in job skill demands in oecd countries. Technical report, The Review of Economics and StatisticsGoogle Scholar
  45. Hanson GH (2012) The rise of middle kingdoms: emerging economies in global trade. NBER working paper 17961, National Bureau of Economic ResearchGoogle Scholar
  46. Hanson G, Harrison A (1999) Trade liberalization and wage inequality in Mexico. Ind Labor Relat Rev 52(2):271–288Google Scholar
  47. Heckman JJ (1979) Sample selection bias as a specification error. Econometrica 47(1):153–161Google Scholar
  48. Heckman JJ, Hotz VJ (1989) Choosing among alternative nonexperimental methods for estimating the impact of social programs: the case of manpower training. J Am Stat Assoc 84(408):862–874Google Scholar
  49. Hummels D (2007) Transportation costs and international trade in the second era of globalization. J Econ Perspect 21(3):131–54Google Scholar
  50. Hummels D, Jrgensen R, Munch J, Xiang C (2014) The wage effects of offshoring: evidence from Danish matched worker-firm data. Am Econ Rev 104(6):1597–1629.  https://doi.org/10.1257/aer.104.6.1597 Google Scholar
  51. ILO (2011) Trade and employment from myths to facts. Technical report, International Labour OrganizationGoogle Scholar
  52. ILO (2014) Trends in informal employment in Peru: 2004–2012. Technical report, International Labour OrganizationGoogle Scholar
  53. Klein R, Vella F (2009) Estimating the return to endogenous schooling decisions via conditional second moments. J Hum Resour 44(4):1047–1065Google Scholar
  54. Klein R, Vella F (2010) Estimating a class of triangular simultaneous equations models without exclusion restrictions. J Econom 154(2):154–164Google Scholar
  55. Korenman S, Neumark D (1990) Marriage, motherhood, and wages. Technical report, National Bureau of Economic ResearchGoogle Scholar
  56. Lee JW, Wie D (2015a) Technological change, skill demand, and wage inequality: evidence from Indonesia. World Dev 67:238–250Google Scholar
  57. Lee JW, Wie D (2015b) Technological change, skill demand, and wage inequality: evidence from Indonesia. World Dev 67:238–250Google Scholar
  58. Liu R (2010) Import competition and firm refocusing. Can J Econ 43(2):440–466Google Scholar
  59. Meschi E, Taymaz E, Vivarelli M (2011) Trade, technology and skills: evidence from Turkish microdata. Labour Econ 18(1):S60–S70Google Scholar
  60. Moreno M, Nopo H, Saavedra J, Torero M (2012) Detecting gender and racial discrimination in hiring through monitoring intermediation services: the case of selected occupations in metropolitan Lima, Peru. World Dev 40(2):315–328Google Scholar
  61. Muendler MA (2008) Trade and workforce changeover in Brazil. The analysis of firms and employees: quantitative and qualitative approaches, NBER Chapters. National Bureau of Economic Research Inc, pp 269–308Google Scholar
  62. \(\tilde{{\rm N}}\)opo H (2008) Matching as a tool to decompose wage gaps. Rev Econ Stat 90(2):290–299Google Scholar
  63. Pavcnik N (2003) What explains skill upgrading in less developed countries? J Dev Econ 71:311–328Google Scholar
  64. Peri G, Sparber C (2009) Task specialization, immigration, and wages. Am Econ J Appl Econ 1(3):135–169Google Scholar
  65. Pissarides C (1997) Learning by trading and the returns to human capital in developing countries. World Bank Econ Rev 11(1):17–32Google Scholar
  66. Raveh O, Reshef A (2016) Capital imports composition, complementarities, and the skill premium in developing countries. J Dev Econ 118:183–206Google Scholar
  67. Roy AD (1951) Some thoughts on the distribution of earnings. Oxf Econ Pap 3(2):135–146Google Scholar
  68. WIEGO (2010) Informal economy budget analysis in Peru and metropolitan lima. Technical report, Women in informal employment globalizing and organizingGoogle Scholar
  69. Wooldridge JM (2010) Econometric analysis of cross section and panel data. The MIT press, BostonGoogle Scholar
  70. World Bank (2013) World bank development report 2013. Technical report, World BankGoogle Scholar
  71. World Bank (2015) World bank development indicators. Online database, World BankGoogle Scholar
  72. WTO (2007) Trade policy review: Peru. Secretariat report. World Trade OrganizationGoogle Scholar
  73. WTO (2013) Trade policy review: Peru. Secretariat report. World Trade OrganizationGoogle Scholar
  74. Yi L, Ng T (2013) Import competition and skill content in U.S. manufacturing industries. Rev Econ Stat 95(4):1404–1417Google Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  • Elizabeth J. Casabianca
    • 1
  • Alessia Lo Turco
    • 2
    Email author
  • Claudia Pigini
    • 2
  1. 1.PrometeiaBolognaItaly
  2. 2.Università Politecnica delle MarcheAnconaItaly

Personalised recommendations