Rue de la Banque No. 57, February 2018
How has competition from Chinese exports affected the French labour market? This article aims to answer this question by exploiting the variation in exposure to competition from China across employment zones. The results suggest that around 13% of the decline in manufacturing employment in France from 2001 to 2007 is due to Chinese competition. The adverse effect on hourly wages is uniform along the wage distribution in the manufacturing sector, and concentrated in the middle of the distribution in the other sectors. The impact on the lowest wages is small, probably as a result of the lower limit set by the statutory minimum wage. The estimated impacts, albeit negative, do not necessarily imply that trade with China has not been generally beneficial. An assessment in terms of welfare would require the measurement of gains to consumers and firms that use imported intermediate goods – and whose productivity gains also ultimately benefit consumers.