Labor Market Adjustments after a Large ImportShock: Evidence from the German ClothingIndustry and the Multi-Fibre Arrangement

This paper considers labor market adjustments following a large import shock in the Germanclothing industry caused by the phasing out of the Multi-Fibre Arrangement. Using theGerman shoe industry as a control group and administrative data, we study adjustments onthe individual and firm level using difference-in-differences. Our results suggest relativelysmall increases in unemployment risk and no wage effects on the individual level, despite a30% increase in plant mortality. Part of the different effects found for plants and individualscan be attributed to the reallocation of workers into other industries and occupations....