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Title: The China Syndrome: Local Labor Market Effects of Import Competition in the United States

Citation Type: Working Paper

Publication Year: 2013

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Abstract: We analyze the effect of rising Chinese import competition between 1990 and 2007 on U.S. local labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization and instrumenting for U.S. imports using changes in Chinese imports by other high-income countries. Rising imports cause higher unemployment, lower labor force participation, and reduced wages in local labor markets that house import competingmanufacturing industries. In our main specification, import competition explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets

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Authors: Dorn, David; Hanson, Gordon H.; Autor, David H.

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Publication Number: 7150

Institution: Institute for the Study of Labor

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Publisher Location: Bonn, Germany

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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