The impact of real exchange rate shocks on manufacturing workers: An autopsy from the MORG

Douglas Campbell and Lester Lusher

Journal of International Money and Finance, 2019, vol. 91, issue C, 12-28

Abstract: We study the impact of large real exchange rate shocks on workers in sectors initially more exposed to international trade using the Current Population Survey’s (CPS) Merged Outgoing Rotation Group (MORG) from 1979 to 2010 combined with new annual measures of imported inputs, a proxy for offshoring. We find that in periods when US relative prices are high, and imports surge relative to exports, workers in sectors with greater initial exposure to international trade were more likely to be unemployed or exit the labor force a year later, but did not experience significant declines in wages conditional on being employed. Contrary to the usual narrative, we find negative wage effects for higher-wage, but not lower-wage workers, particularly for those who are less-educated.

Keywords: Real exchange rates; Labor market impact of trade shocks; Inequality; American manufacturing (search for similar items in EconPapers)
JEL-codes: F10 F16 F41 L60 N60 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The Impact of Real Exchange Rate Shocks on Manufacturing Workers: An Autopsy from the MORG (2018)
Working Paper: The Impact of Real Exchange Rate Shocks on Manufacturing Workers: An Autopsy from the MORG (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:91:y:2019:i:c:p:12-28

DOI: 10.1016/j.jimonfin.2018.09.004

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