Value Share Import Competition and US Manufacturing Employment

Roger White

Chapter Chapter 5 in Making Sense of Anti-trade Sentiment, 2014, pp 77-87 from Palgrave Macmillan

Abstract: Abstract The examination of trade-induced industry-level employment effects presented in chapter 4 reveals modest wage and employment effects. Exports and imports were found to be positively and negatively related, respectively, to the employment of production workers and nonproduction workers and to average industry-level wages of production workers. In this chapter, we continue our examination of the relationship between international trade and domestic employment using an alternative measure of import competition. Developed by Schott (2002), the value share measure of import competition is the share of industry-level imports sourced from nations where Gross Domestic Product (GDP) per capita is less than 5 percent of the US level. The rationale is that lower labor costs confer an advantage to foreign firms. If relative GDP per capita is a proxy for United States-foreign wage differentials, then nations with GDP per capita levels below the US level may be potential sources for import competition. A potential advantage of the value share measure is that, unlike traditional measures of import competition (e.g., import penetration rates, import price indexes, and trade-weighted exchange rates), the value share measure avoids potential simultaneity and, thus, may permit a more definitive analysis of a hypothesized causal link between imports and domestic job loss.

Keywords: Gross Domestic Product; Total Factor Productivity; Production Worker; North American Free Trade Agreement; Production Employment (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:palchp:978-1-137-37325-0_5

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137373250

DOI: 10.1057/9781137373250_5

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().