Import Competition and the Great U.S. Employment Sag of the 2000s

Daron Acemoglu, David Autor, David Dorn, Gordon Hanson and Brendan Price

No 20395, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable gains in employment rates it had achieved during the 1990s, with major contractions in manufacturing employment being a prime contributor to the slump. The U.S. employment "sag" of the 2000s is widely recognized but poorly understood. In this paper, we explore the contribution of the swift rise of import competition from China to sluggish U.S. employment growth. We find that the increase in U.S. imports from China, which accelerated after 2000, was a major force behind recent reductions in U.S. manufacturing employment and that, through input-output linkages and other general equilibrium effects, it appears to have significantly suppressed overall U.S. job growth. We apply industry-level and local labor market-level approaches to estimate the size of (a) employment losses in directly exposed manufacturing industries, (b) employment effects in indirectly exposed upstream and downstream industries inside and outside manufacturing, and (c) the net effects of conventional labor reallocation, which should raise employment in non-exposed sectors, and Keynesian multipliers, which should reduce employment in non-exposed sectors. Our central estimates suggest net job losses of 2.0 to 2.4 million stemming from the rise in import competition from China over the period 1999 to 2011. The estimated employment effects are larger in magnitude at the local labor market level, consistent with local general equilibrium effects that amplify the impact of import competition.

JEL-codes: F16 J23 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-lab and nep-lma
Note: ITI LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages S141 - S198.

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Related works:
Journal Article: Import Competition and the Great US Employment Sag of the 2000s (2016)
Working Paper: Import Competition and the Great U.S. Employment Sag of the 2000s (2015)
Working Paper: Import Competition and the Great U.S. Employment Sag of the 2000s (2015)
Working Paper: Import Competition and the Great U.S. Employment Sag of the 2000s (2015)
Working Paper: Import competition and the great U.S. employment sag of the 2000s (2015)
Chapter: Import Competition and the Great US Employment Sag of the 2000s (2013)
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