They're Beating Us in Trade? The effect of Chinese imports on U.S. manufacturing labor dynamics

Abstract

This paper analyzes the effect that rising levels of imports from China to the United States between 2000 and 2007 have on U.S. local labor market outcomes. I exploit geographical variation in industry make-up within the manufacturing sector to estimate the effect of import competition on U.S. manufacturing employment, earnings, and worker flows. Using administrative data from the Quarterly Workforce Indicators (QWI), this paper builds on the data produced by Autor, Dorn, and Hanson (2013) and replicates the authors' finding that commuting zone locations that are more exposed to import competition from Chinese goods have greater declines in manufacturing employment. By also examining manufacturing worker flows, this paper adds new findings to the previously existing trade and labor literature. I estimate that an exogenous $1,000 increase in import exposure per worker from Chinese goods between 2000 and 2007 is associated with an 8.7 percent decline in U.S. manufacturing hires and a 4.9 percent decline in U.S. manufacturing separations at the commuting zone level, with hiring losses concentrated among younger and less-educated workers. The resultant decline in worker separations partially reconciles Autor et al. (2013) with its recent critique by Rothwell (2017).