Re-examining the Effects of Trading with China on Local Labor Markets: A Supply Chain Perspective

Zhi Wang (), Shang-Jin Wei, Xinding Yu and Kunfu Zhu

No 24886, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply chain perspective, (b) uses intermediate input imports rather than total imports in computing the downstream exposure, and (c) uses exporter-specific information to allocate imported inputs across US sectors. We find robust evidence that the total impact of trading with China is a positive boost to local employment and real wages. The most important factor is employment stimulation outside the manufacturing sector through the downstream channel. This overturns the received wisdom from the reduced-form literature and provides statistical support for a key mechanism hypothesized in general equilibrium spatial models.

JEL-codes: F16 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-cna, nep-lma and nep-ure
Note: ITI
References: Add references at CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
http://www.nber.org/papers/w24886.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24886

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24886

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().