Workers’ Responses to Increasing Import Exposure and the Implications of These for Their Well-Being

How do individual workers adapt to the challenges posed by modern trade, and how does this affect their well-being? This thesis examines the impact of increased import exposure on job security, wages, and adaptation strategies among workers in Germany and the United States. It explores the differences between competition-increasing imports, which can potentially replace domestic jobs, and productivity-enhancing imports, which support domestic production. Additionally, it offers new insights into how trade exposure can be measured at the occupational level to account for the specialization patterns prevalent in global value chains.

The empirical findings reveal that competition-increasing imports tend to create greater job insecurity, particularly among workers in routine occupations, reflecting concerns about globalization’s impact on employment. In contrast, productivity-enhancing imports can improve job security for highly skilled and supervisory workers, as they contribute to greater productivity. The thesis also shows that some workers facing pronounced import competition adapt by relocating or changing jobs, leading to better employment opportunities and wage improvements.

By highlighting the varied experiences of individual workers, this thesis provides a deeper understanding of the interplay between trade, labor markets, and workers’ adaptation strategies. Furthermore, it advocates for using more disaggregated exposure measures that account for the crucial role of a worker’s occupation. Finally, it emphasizes the need for policies that support regional and job mobility, as well as skill development, to ensure that the benefits of trade are more equitably distributed.