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

David Autor, David Dorn and Gordon Hanson

No 7150, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyze the effect of rising Chinese import competition between 1990 and 2007 on U.S. local labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization and instrumenting for U.S. 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 U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets.

Keywords: import competition; trade flows; local labor markets; China (search for similar items in EconPapers)
JEL-codes: F16 H53 J23 J31 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2013-01
New Economics Papers: this item is included in nep-cna, nep-ltv and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2572)

Published - published in: American Economic Review, 2013, 103 (6), 2121-68

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Related works:
Journal Article: 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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