Import Competition and Social Mobility: Evidence from Brazil

CÉSAR, ANDRÉS; CIASCHI, MATIAS; FALCONE, GUILLERMO; NEIDHÖFER, GUIDO

Cordoba

Congreso; LVII Reunión Anual de la Asociación Argentina de Economía Política; 2022

Facultad de Ciencias Economicas, Universidad Nacional de Cordoba

There is a large body of literature studying the effects of trade shocks on worker?s job and wage losses. However, little is known about whether these effects transmit into future generations. This paper exploits the heterogeneous increase of Chinese import competition across Brazilian industries to evaluate whether this shock has differentially affected children of more exposed fathers. We use an specific survey module containing precise retrospective information on parental employment and education, among other characteristics. Our findings suggest that children from more exposed fathers have less education and earnings in their adulthood. We also find a higher likelihood of having and informal job, operational occupation and social assistance dependence. Importantly, these effects are larger for children from low socioeconomic backgrounds, suggesting that this particular trade shock decreased intergenerational mobility and accentuated poverty traps.