The China Syndrome: Local Labor Market Effects of Import Competition in the United States | Zendy

David Autor | Zendy; David Dorn | Zendy; Gordon Hanson | Zendy

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The China Syndrome: Local Labor Market Effects of Import Competition in the United States

Author(s) -

David Autor,

David Dorn,

Gordon Hanson

Publication year - 2013

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.103.6.2121

Subject(s) - economics , unemployment , competition (biology) , china , labour economics , quarter (canadian coin) , transfer payment , international economics , market economy , macroeconomics , ecology , political science , law , biology , history , archaeology , welfare

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.National Science Foundation (U.S.) (SES-0239538

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