Essays in International Trade

This thesis consists of three chapters that empirically investigate issues pertaining to international trade. Chapter 1 provides clear evidence that increased exposure to import competition from low-income countries results in lower quality matches between workers and firms, using matched employer-employee data from Italy. I measure match quality as the match (worker-firm) fixed effect from a wage regression that includes a rich set of time-varying observables, as well as worker and firm fixed effects. Import shocks reduce match quality, shifting the entire distribution of match effects leftward. This occurs because workers accept worse matches, but not because of workers in good matches leaving their jobs. Back-of-the-envelope calculations suggest that, for the average firm, a one standard deviation increase in import competition decreases profitability per worker by approximately 10% through lower match quality. Chapter 2 examines whether import competition affects the gender wage gap. While specifications without worker or firm fixed effects suggest that the wage gap closes with increased import competition, I find that import competition lowers women's wages relative to men when controlling for unobserved worker and firm heterogeneity. Accounting for these sources of heterogeneity is important because: 1) women, particularly women that earn low wages, are more likely than men to change industries or leave the sample as a response to import competition, and 2) firms that employ women are relatively more likely to exit and reduce employment due to import competition. Chapter 3 provides evidence that that increased numbers of U.S. troops in a country is associated with increased exports to and imports from the U.S. I provide evidence suggesting that this effect is not driven by favourable U.S. policies that coincided with troop increases. I find that the pro-trade effect of troops is concentrated in differentiated and consumer goods industries. I also find some evidence that soldiers provide a boost to the trade of cultural goods. The results in this paper complement abundant anecdotal evidence that suggests that American military personnel bring back foreign goods and culture while also spreading American culture and goods.Ph.D