To Find Relative Earnings Gains After the China Shock, Look Upstream and Outside Manufacturing

Justin Pierce, Peter K. Schott and Cristina J. Tello-Trillo ()

No 1431, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We find that US workers outside manufacturing exhibit relative earnings increases after US trade liberalization with China. These relative gains cumulate over time as the beneficial effect of a workerâ s upstream exposureâ increased competition from China in input marketsâ more than offsets the detrimental impact of her own and downstream (customer) exposures. These relative gains are smaller for non-manufacturing workers with less ex ante firm tenure and lower initial earnings, and are absent among manufacturing workers due to a lack of upstream gains and stronger downstream losses.

Keywords: Employment; Manufacturing; Labor markets; International trade; Trade policy (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F16 (search for similar items in EconPapers)
Pages: 48 p.
Date: 2026-01-13
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:102365

DOI: 10.17016/IFDP.2026.1431

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