The Impact of Chinese Firms in Local Labor Markets

Policy Context

This project aims to understand the effect that working for a foreign firm has on local work preferences. Specifically, it examines the effect of Chinese firms arriving in Ethiopia and if working for those firms creates new preferences for workers of Ethiopian origin.

Study Design

This was a pilot study looking at the Hawassa industrial park where workers were recruited through a centralized system and allocated quasi-randomly to different firms. David Wu received funds to perform scoping work with HR managers at the industrial park to understand worker-firm relationships.

Results and Policy Lessons

Though results weren’t pursued in follow-up studies, the work did inform future projects undertaken by David and his collaborators at the Hawassa Industrial Park. These follow-up studies included David’s work examining the effect of information on turnover within the factories.