Chinese Import Competition and Gendered Labor Market Outcomes: Evidence from Ethiopian Firm-Level Data

Abstract

Abstract In this paper, we analyse the relationship between Chinese import competition and gendered labor market outcomes within the context of a developing country. To do this, we merge a rich manufacturing firm-level panel data set from Ethiopia with trade data covering the years 1997–2010. Thus, we map out the effect of trade shocks from import surges on labor force participation and compensation, decomposed by gender. Results from the study show that rising import competition from China had a heterogeneous effect on female and male labor market outcomes. Import competition from China is associated with a negative and statistically significant effect on female employment, but not male employment. Looking at workers’ occupation, we find that for production workers import competition is adversely related with female employment outcomes while there is no statistically significant association with employment of administrative workers. For wage inequality, male wages in general are negatively associated with import competition, while we found no effect on female wages.