Full Citation

Title: Re-examining the Effects of Trading with China on Local Labor Markets: A Supply Chain Perspective

Citation Type: Working Paper

Publication Year: 2018

ISBN:

ISSN:

DOI: 10.3386/w24886

NSFID:

PMCID:

PMID:

Abstract: The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply chain perspective, (b) uses intermediate input imports rather than total imports in computing the downstream exposure, and (c) uses exporter-specific information to allocate imported inputs across US sectors. We find robust evidence that the total impact of trading with China is a positive boost to local employment and real wages. The most important factor is employment stimulation outside the manufacturing sector through the downstream channel. This overturns the received wisdom from the reduced-form literature and provides statistical support for a key mechanism hypothesized in general equilibrium spatial models.

Url: http://www.nber.org/papers/w24886.pdf

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Authors: Wang, Zhi; Wei, Shang-Jin; Yu, Xinding; Zhu, Kunfu

Series Title: NBER Working Paper

Publication Number: 24886

Institution: National Bureau of Economic Research

Pages:

Publisher Location: Cambridge, MA

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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