The China Syndrome: Local Labor Market Effects of Import Competition in the United States
Author(s)Autor, David H.; Dorn, David; Hanson, Gordon H.
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We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross- market variation in import exposure stemming from initial differences in industry specialization and instrumenting for US 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 US manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets.
DepartmentMassachusetts Institute of Technology. Department of Economics
American Economic Review
American Economic Association
Autor, David H, David Dorn, and Gordon H Hanson. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” American Economic Review 103, no. 6 (October 2013): 2121–2168. © 2013 American Economic Association
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