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Trade Adjustment: Worker Level Evidence

David Autor (), David Dorn, Gordon Hanson () and Jae Song ()

No 8514, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We analyze the effect of exposure to international trade on earnings and employment of U.S. workers from 1992 through 2007 by exploiting industry shocks to import competition stemming from China's spectacular rise as a manufacturing exporter paired with longitudinal data on individual earnings by employer spanning close to two decades. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings, face elevated risk of obtaining public disability benefits, and spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, and low attachment to the labor force. Low-wage workers churn primarily among manufacturing sectors, where they are repeatedly exposed to subsequent trade shocks. High-wage workers are better able to move across employers with minimal earnings losses, and are more likely to move out of manufacturing conditional on separation. These findings reveal that import shocks impose substantial labor adjustment costs that are highly unevenly distributed across workers according to their skill levels and conditions of employment in the pre-shock period.

Keywords: trade flows; labor demand; earnings; job mobility; social security programs (search for similar items in EconPapers)
JEL-codes: F16 H55 J23 J31 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int, nep-lab and nep-ltv
Date: 2014-09
References: View references in EconPapers View complete reference list from CitEc
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Published in: Quarterly Journal of Economics, 2014, 129 (4), 1799-1860

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Related works:
Journal Article: Trade Adjustment: Worker-Level Evidence (2014) Downloads
Working Paper: Trade Adjustment: Worker Level Evidence (2014) Downloads
Working Paper: Trade Adjustment: Worker Level Evidence (2013) Downloads
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