Using the dismantling of trade quotas on Chinese textile and clothing products in conjunction with China's accession to the WTO and an employer-employee matched data-set for the period 1999 to 2010, workers' adjustments to intensi ed low-wage competition is analyzed. Utilizing within-industry heterogeneity in workers' exposure to this trade shock, results reveal negative and signi cant impact of the low-wage import shock on workers' future earnings and employment trajectories. The abolishment of quotas leads to higher likelihood of unemployment and shorter future tenure for workers. While most workers employed by rms exposed to low-wage competition are in uenced negatively to a similar extent at the exposed employer, the degree of adjustment to the initial shock varies greatly across di erent types of workers. In particular less-educated, older and those who had elementary occupations or occupations that require industry-speci c training at the exposed rms had the worst adjustment experience. The results suggest that adjustment costs are very important and heterogeneous across di erent types of workers and highlight the need for targeting speci c groups in assistance and adjustment schemes.
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