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ItemChina shock: the impact on trade and incomes(2016) Pessoa, João PauloIs US presidential candidate Donald Trump right when he claims that the Chinese are causing serious damage to American workers? Research by João Paulo Pessoa analyses the impact of the recent massive increase in China’s participation in world trade on jobs and incomes in developed economies. He finds that the effects of the ‘China shock’ on wages and unemployment vary substantially across sectors within countries. Greater trade benefits workers in services and harms workers in low-tech manufacturing. This indicates that even when developed economies face a fierce competitor like China, they also receive many benefits. ItemInternational competition and labor market adjustment(2016) Pessoa, João PauloHow does welfare change in the short- and long-run in high wage countries when integrating with low wage economies like China? Even if consumers benefit from lower prices, there can be significant welfare losses from increases in unemployment and lower wages. I construct a dynamic multi-sectorcountry Ricardian trade model that incorporates both search frictions and labor mobility frictions. I then structurally estimate this model using cross-country sector-level data and quantify both the potential losses to workers and benefits to consumers arising from China’s integration into the global economy. I find that overall welfare increases in northern economies, both in the transition period and in the new steady state equilibrium. In import competing sectors, however, workers bear a costly transition, experiencing lower wages and a rise in unemployment. I validate the micro implications of the model using employer-employee panel data.