The Surprisingly Swift Decline of U.S. Manufacturing Employment

By Justin R. Pierce, Peter K. Schott. Social Science Research Network, 2013

1,239 citations recorded by the source corpus.

This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/50b826a045fdd2967c01b909568577e4bf78ecec

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Citations in the corpus

US exports and employment (2019, neutral): “The work of Autor, Dorn, and Hanson (2013), Pierce and Schott (2016), and Acemoglu et al. (2016) has alerted us the impact of the China shock on US employment and unemployment.”
The pandemic and economic policy uncertainty (2020, background): “Similarly, Pierce and Schott (2016) demonstrate that uncertainty's effects on employment are conditional given the extent to which the industry is exposed to international trade, as a higher exposure to international trade leads to increased effects.”
The Transformation of Manufacturing and the Decline in US Employment (2019, background): “Acemoglu et al. (2016), Autor, Dorn, and Hanson (2013), and Pierce and Schott (2016) all highlighted the role of increased competition from China in declining manufacturing employment during the 2000s.”
From Good to Bad Concentration? US Industries over the Past 30 Years (2019, background): “Normal trade relations gap from Pierce and Schott (2016). Figure reports regression results following equation (2), including 95% confidence intervals.”
Does product market competition foster corporate social responsibility? Evidence from trade liberalization (2015, background): “Given their relatively higher wages, U.S. companies responded by shifting their production from labor-intensive products to more skill- and capital-intensive products (e.g., Bernard, Jensen, and Schott, 2006b; Pierce and Schott, 2012).”
The China Syndrome: Local Labor Market Effects of Import Competition in the United States (2013, methodology): “This finding mirrors the outcomes of industry-level studies such as Edwards and Lawrence (2010) or Ebenstein et al. (2010), which observe no negative wage effects of imports on US workers in import-competing manufacturing industries.”
Brexit and the macroeconomic impact of trade policy uncertainty (2019, background): “Pierce and Schott (2016) and Handley and Limão (2017), for example, argue that before China joined the World Trade Organization in 2001, uncertainty about U.S. trade policy towards Chinese goods significantly affected U.S. imports from China and lowered U.S. households’ welfare.”
Is the WTO Passé (2015, neutral): “…and discuss economic research that interprets and evaluates this treatment.66 65 In addition to the Handley (2014) and Handley and Limão (forthcoming) papers we discuss in the text, other recent papers in this emerging literature include Limão and Maggi (forthcoming) and Pierce and Schott (2015).”
Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China? (2015, positive): “We follow Pierce and Schott (2016) and exploit the fact that the US changed its tariff agreement with China in 2000. Since the Smoot-Hawley Tariff of 1930, imports to the US from nonmarket economies such as China are subject to relatively high tariff rates, known as non-Normal Trade Relations tariff”