American Economic Review Vol. 103 No. 6 2013

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

David H. Autor¹; David Dorn²; Gordon Hanson³

¹ Department of Economics, MIT, 50 Memorial Drive, E52-371, Cambridge, MA 02142, and NBER. · ² CEMFI, Casado del Alisal 5, 28014 Madrid, Spain. · ³ School of International Relations and Pacific Studies, 0519, University of California, San Diego, 9500 Gilman Drive, La Jolla, CA 92093-0519, and NBER.

Abstract

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.

DOI

10.1257/aer.103.6.2121

Volume

103

Issue

6

Pages

2121-2168

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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