Household responses to trade shocks
Case study details
| Metadata item | Details |
|---|---|
| Publication date: | 16 April 2026 |
| Owner: | Office for National Statistics (ONS) |
| Contact: | SRS.Impact@ons.gov.uk |
The analytical challenge
Trade shocks are often assessed by looking at what happens to individual workers or firms. However, policymakers also need to understand how households adjust when earnings or job security are affected. During the 2000s, rising import competition from China contributed to significant change in UK manufacturing. What was less clear was:
- how these pressures influenced household decisions about work, retirement, and labour supply
- whether responses differed for men and women
This evidence gap mattered for analysts working on labour market resilience, equality impacts and support for households affected by structural change.
Measuring exposure to trade on households
A team at the Institute for Fiscal Studies and University of Surrey used the Office for National Statistics (ONS) Longitudinal Study, which links UK census data for a one per cent sample of people in England and Wales over time. This uniquely rich dataset made it possible to follow individuals and their partners across a decade of major trade disruption.
The data was linked to additional sources:
- UN Comtrade for industry‑level trade flows used to measure import competition
- Business Structure Database, ONS (2021), to calculate industry sales and construct trade exposure measures
- linked birth registration data to examine fertility responses
All analysis was carried out securely in the ONS Secure Research Service, using de‑identified data under the Five Safes Framework.
Trade exposure was measured using international trade data on rising imports from China, focusing on differences across industries. By linking people within households, the analysis went beyond standard worker‑level studies to examine how partners adjusted their labour supply when trade pressures affected one member of the household.
Uneven household responses
The study found strong and uneven household responses. Older men in trade‑exposed industries were more likely to delay retirement or move into self‑employment, while women showed little comparable response. Men also increased their labour supply when their partners faced trade shocks, but women did not. These findings highlight that households adjust asymmetrically, reflecting gender norms and unequal access to alternative employment.
The analysis has informed discussions across government about labour market adjustment, gendered impacts, and how policy can better support households facing economic shocks. Future work could develop this approach further to assess other forms of structural change.
About the ONS Secure Research Service
The ONS Secure Research Service is an accredited trusted research environment providing secure access to de‑identified, unpublished data following the Five Safes Framework.
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About the analysts
Aitor Irastorza-Fadrique was a Research Officer at the IFS when the research was conducted. Since January 2026, he is a Postdoctoral Researcher at the University of the Basque Country. Peter Levell is a Deputy Research Director at the IFS. Matthias Parey is Professor of Economics at the University of Surrey.