Did Tariffs Make American Manufacturing Great? New Evidence from the Gilded Age

Alexander Klein and Christopher Meissner

No 19619, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the relationship between tariffs and labor productivity in US manufacturing between 1870 and 1909. Using highly dis-aggregated tariff data, state-industry data for the manufacturing sector, and a novel identification strategy, results show that tariffs reduced labor productivity. Tariffs also generally reduced the average size of establishments within an industry but raised output prices, value-added, gross output, employment, and the number of establishments. We also find evidence of heterogeneity in the association between tariffs and value added, gross output, employment, and establishments across groups of industries. We conclude that tariffs may have reduced labor productivity in manufacturing by weakening import competition and by inducing entry of smaller, less productive domestic firms. Our research also reveals that lobbying by powerful and productive industries may have been at play. The era’s high tariffs are unlikely to have helped the US become a globally competitive manufacturer.

Keywords: Tariffs; Labor productivity (search for similar items in EconPapers)
JEL-codes: F13 F15 N11 O14 O47 (search for similar items in EconPapers)
Date: 2024-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP19619 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:19619

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP19619

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().