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Title: Cultural Capital in the Labor Market: Evidence from Two Trade Liberalization Episodes

Citation Type: Miscellaneous

Publication Year: 2014

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Abstract: Using two trade liberalization episodes, I examine how bilateral trade affects the labor market returns to country-specific cultural capital. In particular, I assess how NAFTA and Chinas entry into the WTO affected the labor market outcomes of workers with Mexican and Chinese backgrounds in the United States. I find that, when two countries engage in trade activity, the demand for individuals endowed with the cultural capital specific to the trading partner country increases, though this effect is highly heterogeneous in skill level. High-skilled Mexican descendants experience higher wage growth and occupational upgrading as an effect of NAFTA; they also move to industries most exposed to trade with Mexico after the implementation of the agreement. Similar results are found when analyzing the effect of Chinas trade liberalization on the workers of Chinese background. The effects of trade seems to be larger in non-border regions, where informational asymmetries are likely to be the strongest. Moreover, it mostly stems from US-born individuals, and the analysis of Central American descendants suggests that at least part of the effect of NAFTA is specific to Mexico. While language might be an important part of a countrys cultural capital, it does not explain the effect of trade alone, though evidence suggests that its role is more important in the case of China, when language barriers are more prevalent.

Url: http://www.econ.upf.edu/gpefm/jm/pdf/paper/JMP Surovtseva.pdf

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Authors: Surovtseva, Tetyana

Publisher: Universitat Pompeu Farba

Data Collections: IPUMS USA, IPUMS CPS

Topics: Labor Force and Occupational Structure, Other, Poverty and Welfare

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