Date: 11 Oct 2022 (Tue)
CUHK-Tsinghua University Brownbag Seminar:
Informal Employment as Buffer to Shocks: The Case of the Recent US-China Trade Tensions
11 Oct 2022, Tuesday
12:20 pm – 1:20 pm (Hong Kong Time, UTC+8)
He LI, Tsinghua University
We analyze millions of Chinese job vacancies posted online and study the impact of the recent US-China trade tensions on the labor market, with particular attention on informal sector jobs. We first build city-specific measures of exposure to changes in US and Chinese tariffs, and then we show that in cities most exposed, both posted vacancies and salaries offered declined. Next, we decompose posted vacancies into formal and informal sector jobs – informal defined broadly as jobs that do not comply with labor legislation and show a sharp difference in the margins of adjustment: in the informal sector, the wage payment declined more sharply, while there exists nominal wage rigidity in formal sector. We also test the relationship between the level of exposure to US-tariffs and non-wage compensation (subsidy proportion and bonus proportion) as well as job requirements (educational attainment and experience). Our novel findings offer new insights into how labor markets adjust to shocks, especially to those related to trade.
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