Trade Adjustment: Worker Level Evidence

By David H. Autor, David Dorn, Gordon H. Hanson, Jae Song. Social Science Research Network, 2014

809 citations recorded by the source corpus.

In the past two decades, China’s manufacturing exports have grown spectacularly. U.S. imports from China have surged, while U.S. exports to China have increased more modestly, consistent with the two countries’ divergent current account imbalances. Using data on individual earnings by employer from the Social Security Administration, we examine how exposure to import competition aects the long-term earnings and employment trajectory of workers initially employed in manufacturing industries. We find that workers who in 1991 were employed in industries that experienced high subsequent levels of import growth garner lower cumulative earnings over the subsequent sixteen years (1992 through 2007) and are at substantially elevated risk of obtaining Social Security Disability Insurance benefits as the only recorded source of income in a given year. More exposed individuals spend less time working for their initial employers, less time working in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Eects on earnings and employment are larger for individuals whose initial employers were relatively large, whose initial wages where below their firm’s average, and who in the pre-sample period worked part time or intermittently. We obtain similar results using alternative measures of trade exposure. Our findings suggest that there is significant worker-level adjustment cost to import shocks and that adjustment is highly uneven across individuals according their conditions of employment in the pre-shock period.

Subfields: Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/ccc8d8f6767a6d1081c3381c0a9d57c328429dc3

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Citations in the corpus

China's “Great Migration”: The impact of the reduction in trade policy uncertainty (2019, neutral): “…outcomes see Goldberg and Pavcnik (2005), McCaig (2011), Hasan et al. (2012), Kovak (2013), Autor et al. (2013), Monte (2016), etc.; for the persistency of the effects of the shocks see Dix-Carneiro and Kovak (2017) and Autor et al. (2014); for a recent review of the literature see Pavcnik (2017).”
Shift-Share Designs: Theory and Inference* (2018, neutral): “22For empirical examples of this setting, see, for example, Maestas, Mullen and Strand (2013); Dobbie and Song (2015); Aizer and Doyle (2015), or Silver (2016).”
Quasi-Experimental Shift-Share Research Designs (2018, positive): “A large and growing number of empirical studies use shift-share (or Bartik ) instruments, which average a set of aggregate shocks with unit-speci c weights measuring shock exposure. This research design was pioneered in studies of local labor market dynamics, including Bartik (1991) and Blanchard an”
Inequality and Globalization: A Review Essay (2018, positive): “Much popular attention in the United States has been given to the implications for American workers of import competition with China (in particular), and there is indeed evidence of significant labor-market adjustment costs that have been borne especially by low-wage workers (Autor et al. 2014).”
Foreign Competition and Domestic Innovation: Evidence from US Patents (2020, positive): “2 A substantial literature shows that import competition from China has contributed to job loss in US manufacturing (e.g., Bernard, Jensen, and Schott 2006; Autor, Dorn, and Hanson 2013; Autor et al. 2014; Pierce and Schott 2016; Acemoglu et al. 2016).”
THE PERSISTENCE OF POVERTY IN THE CONTEXT OF FINANCIAL INSTABILITY: A BEHAVIORAL PERSPECTIVE (2015, positive): “One strategy might be to deposit a portion of paychecks into government-sponsored instability insurance accounts, to be drawn on when hours and earnings decline or when jobs are lost (for more information, see Autor et al., 2013; Feldstein, 2005; Kletzer & Rosen, 2006; Kling, 2006).”
New Perspectives on the Decline of US Manufacturing Employment (2018, positive): “Autor et al. (2014) and Acemoglu et al. (2016), show that workers in industries with higher growth in Chinese imports experience increased unemployment between 1992 and 2007.”