Import Competition and Labor Regulation: Worker-Level Evidence

Abstract

How does labor regulation shape worker adjustment to import competition? We estimate the effect of collective agreements on French workers’ earnings during the rise of Chinese import competition. Using a nationally-representative matched employer-employee panel and collective agreements data, we document that the negative effect of Chinese competition on workers’ earnings is stronger in more regulated industries. In addition, we find that this exacerbation effect is concentrated among workers in low-wage occupations, such as technical staff and skilled production workers.