How do households adjust to tariff liberalization? Evidence from China's WTO accession*

• 成果类型: Article
• 署名作者: Dai, Mi; Huang, Wei; Zhang, Yifan
• 署名单位: Beijing Normal University; Chinese Academy of Social Sciences; Emory University; National University of Singapore; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2021.102628
• 发表日期: 2021
• 关键词: Household adjustments; trade liberalization; WTO; CHINA

摘要

This paper investigates how households adjust to local labor market shocks caused by import tariff liberalization in China. Exploiting regional variation in the exposure to tariff cuts resulting from the WTO accession, we find that regions that initially specialized in industries facing larger tariff cuts experienced relatively larger wage declines. Households responded to the shock in several ways, including more female and old household members working, more young adults co-residing with parents, and households saving less. These findings suggest an insurance role of households against trade-induced labor market shocks. JEL: F14, F16, J20, R23.