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AIEL 2026


41st Conference of the Italian Association of Labour Economics

Department of Law
Roma Tre University 

Rome, 17-19 September 2026 

The Scarring Effects of the China Shock


Presenter

Corinna De Leo (University of Siena)


Coauthors

Anna D’Ambrosio, Roberto Leombruni and Tiziano Razzolini


Abstract

Using rich Italian administrative employer–employee data, this paper examines early career trajectories and finds that the burden of rising import competition falls disproportionately on labour market entrants. Individuals entering in more exposed sectors work fewer weeks, are more likely to work part-time, receive lower overall remuneration, and display a higher probability of moving toward autonomous work and of switching firms. Results also reveal that entrants exposed to higher import competition face a higher risk of injuries, particularly during non-standard hours such as overtime and night shifts. These persistent effects point to lasting scarring, consistent with evidence for cohorts facing adverse entry conditions, suggesting that workers may become trapped in tasks with limited growth and learning opportunities. The findings suggest that firms respond to import competition by reorganizing production toward more flexible arrangements, adjusting along the intensive margin and increasing the use of flexible work schedules, with implications for workplace safety.