Trade Policy Uncertainty and the Labor Market: State-Level Evidence

Céline Poilly () and Fabien Tripier ()
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Céline Poilly: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique
Fabien Tripier: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: This short paper provides U.S. state-level evidence regarding the effects of trade policy uncertainty on the labor market. We show that a higher exposure to trade policy uncertainty generates a contraction in total hours worked at the state level. The extensive margins of labor is the primary margin of employment adjustment. State-level employment is more strongly impacted by trade policy uncertainty in goods-producing industries, and more particularly in the durable goods industry. States which are more specialized in goods industries, when they face higher uncertainty, tends to postpone hiring by more, which explains the drop in total employment.>

Keywords: Uncertainty Shocks; Tariffs; Labor Market (search for similar items in EconPapers)
Date: 2025
Note: View the original document on HAL open archive server: https://hal.science/hal-05099742v1
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Published in American Economic Review Papers and Proceedings, 2025, 115., pp.172-76. ⟨10.1257/pandp.20251009⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05099742

DOI: 10.1257/pandp.20251009

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