American Economic Review· 2016Q1
The Surprisingly Swift Decline of US Manufacturing Employment
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- 2016year
Short summary
US manufacturing employment dropped sharply after 2000 due to a trade policy change that removed potential tariff increases on Chinese imports, with more exposed industries suffering greater job losses.
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Key points
- US manufacturing employment declined significantly after 2000 due to a trade policy change regarding Chinese imports.
- Industries with higher exposure to the policy change saw greater employment losses.
- The policy change led to increased imports from China and higher entry rates for US importers and Chinese exporters.
- The effect was specific to the US, as the European Union did not experience similar employment declines due to unchanged policy.
AI-generated from the title and abstract; the full text is not read.
Abstract
This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change. (JEL D72, E24, F13, F16, L24, L60, P33)
The authors' abstract, as published at the source. American Economic Review, 2016 · DOI ↗
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Field: General Economics, Econometrics and Finance
General Economics, Econometrics and FinanceEconomics, Econometrics and Finance