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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
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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) Downloads
Working Paper: The China Syndrome: Local Labor Market Effects of Import Competition in the United States (2012) Downloads
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