Workers beneath the Floodgates: The Impact of removing trade quotas for China on Danish workers

Utar H. Workers beneath the Floodgates: The Impact of removing trade quotas for China on Danish workers. Working Papers in Economics and Management. Vol 12-2014. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2014.Using the dismantling of trade quotas on Chinese textile and clothing products in conjunction with China's accession to the WTO and an employer-employee matched data-set for the period 1999 to 2010, workers' adjustments to intensified low-wage competition is analyzed. Utilizing within-industry heterogeneity in workers' exposure to this trade shock, results reveal negative and significant impact of the low-wage import shock on workers' future earnings and employment trajectories. The abolishment of quotas leads to higher likelihood of unemployment and shorter future tenure for workers. While most workers employed by firms exposed to low-wage competition are influenced negatively to a similar extent at the exposed employer, the degree of adjustment to the initial shock varies greatly across different types of workers. In particular less-educated, older and those who had elementary occupations or occupations that require industry-specific training at the exposed firms had the worst adjustment experience. The results suggest that adjustment costs are very important and heterogeneous across different types of workers and highlight the need for targeting specific groups in assistance and adjustment schemes

When the Floodgates Open: 'Northern' Firms' Response to Removal of Trade Quotas on Chinese Goods

Utar H. When the Floodgates Open: 'Northern' Firms' Response to Removal of Trade Quotas on Chinese Goods. Working Papers in Economics and Management. Vol 14-2013. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2013.Using the dismantling of the Multi-fibre Arrangement quotas on Chinese textile and clothing products in conjunction with China's accession to WTO, within firms adjustments to intensified low-wage competition is analyzed. Employing Danish employer-employee matched data supple- mented with transaction-level data from between 1995 and 2007, the analysis shows a significant increase in skill and capital intensity associated with downsizing in response to heightened com- petition. Competition is found to negatively affect employment, value-added and intangible assets of the Danish firms, and firms are found to refocus their innovative efforts away from goods where China's competitive advantage becomes higher. The results show an important role of the distri- butional impact of low-wage competition within firms in restructuring the industry and support theories that indicate compositional changes in the scopes and operations of \Northern" firms in response to competition from \South"

Workers beneath the Floodgates: Low-Wage Import Competition and Workers' Adjustment

Utar H. Workers beneath the Floodgates: Low-Wage Import Competition and Workers' Adjustment. REVIEW OF ECONOMICS AND STATISTICS. 2018;100(4):631-647

Firms and Labor in Times of Violence: Evidence from the Mexican Drug War

Utar H. Firms and Labor in Times of Violence: Evidence from the Mexican Drug War. Working Paper Series. CESIfo; 2018.Violence in Mexico has reached unprecedented levels in recent times. After the government began a crackdown on drug cartels, nation-wide homicides almost tripled between 2006 and 2010. Using rich longitudinal plant-level data, this paper studies the impact of violent conflict on firms, exploiting this period of heightened violence in Mexico commonly referred to as the Mexican Drug War. The empirical strategy uses spatiotemporal variation in violence across Mexican cities and an instrumental variable strategy that relies on the triggers of the Drug War against potential endogeneity of the violence surge. It controls for observable and unobservable differences across cities and firms as well as for product-specific business cycles. The results show significant negative impact of the surge in violence on plants’ output, product scope, employment and capacity utilization. Violence acts as a negative blue-collar labor supply shock, leading to significant increase in skill-intensity within firms. It also deters domestic, but not international, trade. The effect of the violence shock on firms is very heterogeneous, the output effect of violence increases with reliance on local demand, local sourcing and the employment effect of violence is stronger on plants with higher share of female and lower wage workers. The results reveal significant distortive effects of the Mexican Drug War on domestic industrial development in Mexico and suggest that the Drug War accounted for the majority of the aggregate decline in manufacturing employment over 2007-2010

Replication Data for: "Workers beneath the Floodgates: Low-Wage Import Competition and Workers' Adjustment"

Replication Data for: "Workers beneath the Floodgates: Low-Wage Import Competition and Workers' Adjustment

Globalisation and polarisation in the wake of Brexit

Keller W, Utar H. Globalisation and polarisation in the wake of Brexit . VOX CEPR's Policy Portal. 05 .07.2016

Globalisation and polarisation in the wake of Brexit

Keller W, Utar H. Globalisation and polarisation in the wake of Brexit . VOX CEPR's Policy Portal. 05 .07.2016

INTERNATIONAL TRADE AND JOB POLARIZATION: EVIDENCE AT THE WORKER-LEVEL

Keller W, Utar H. INTERNATIONAL TRADE AND JOB POLARIZATION: EVIDENCE AT THE WORKER-LEVEL. NBER WORKING PAPER SERIES. Vol 22315. Cambridge, MA 02138: NATIONAL BUREAU OF ECONOMIC RESEARCH; 2016

Globalization, Gender and the Family

Utar H, Keller W. Globalization, Gender and the Family. NBER Working Paper Series. Vol 25247. Cambridge, MA: National Bureau of Economic Research; 2018.This paper shows that globalization has far-reaching implications for the economy’s fertility rate and family structure because it influences work-life balance. Employing population register data on new births, marriages, and divorces together with employer-employee linked data for Denmark, we show that lower labor market opportunities due to Chinese import competition lead to a shift towards family, with more parental leave taking and higher fertility as well as more marriages and fewer divorces. This pro-family, pro-child shift is driven largely by women, not men. Correspondingly, the negative earnings implications of the rising import competition are concentrated on women, with gender earnings inequality increasing. The market versus family choice turns out to be a major determinant of worker adjustment costs to labor market shocks. While older workers respond to the shock rather similarly whether female or male, for young workers the fertility response takes away the adjustment advantage they typically have–if the worker is a woman. We find that the female biological clock–women having difficulties to conceive beyond their early forties–is of central importance, rather than the composition of jobs and workplaces, as well as other potential causes

Credit Rationing, Risk Aversion and Industrial Evolution in Developing Countries

Bond R, Tybout J, Utar H. Credit Rationing, Risk Aversion and Industrial Evolution in Developing Countries. Working Paper Series. Vol 14116. Cambridge: National Bureau of Economic Research; 2008.Relative to their counterparts in high-income regions, entrepreneurs in developing countries face less efficient financial markets, more volatile macroeconomic conditions, and higher entry costs. This paper develops a dynamic empirical model that links these features of the business environment to cross-firm productivity distributions, entrepreneurs’ welfare, and patterns of industrial evolution. Applied to panel data on Colombian apparel producers, the model yields econometric estimates of a credit market imperfection index, the sunk costs of creating a new business, and a risk aversion index (inter alia). Model-based counterfactual experiments suggest that improved intermediation could dramatically increase the return on assets for entrepreneurial households with modest wealth, and that the gains are particularly large when the macro environment is relatively volatile