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

David Autor, David Dorn and Gordon Hanson

American Economic Review, 2013, vol. 103, issue 6, 2121-68

Abstract: We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross- market variation in import exposure stemming from initial differences in industry specialization and instrumenting for US 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-competing manufacturing industries. In our main specification, import competition explains one-quarter of the contemporaneous aggregate decline in US manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets.

JEL-codes: E24 F14 F16 L60 O47 R12 R23 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.6.2121
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Working Paper: The China Syndrome: Local Labor Market Effects of Import Competition in the United States (2013)
Working Paper: The China Syndrome: Local Labor Market Effects of Import Competition in the United States (2012)
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