The Human Capital Effects of the US Manufacturing Decline

Abstract

This paper analyzes the impacts of rising levels of Chinese imports to the US between 1990 and 2007 on local school attendance and educational attainment. Using data from Census IPUMS and American Community Survey samples, I exploit geographical variation in import exposure stemming from differences in industry make-up within manufacturing to assess how the education outcomes of communities respond to negative shocks to labor demand in manufacturing. I first replicate the findings of Autor, Dorn, and Hanson (2013) that commuting zones that are more exposed to import competition from Chinese goods have greater declines in employment and earnings. These effects are particularly pronounced for workers without a college education. I estimate that an exogenous $1,000 increase in import exposure per worker is associated with a 0.3 percentage point increase in school attendance, with a 0.5 percentage point increase in high school attendance among young adults age 14 – 18. However, I also find evidence that rising imports led to decreases in educational attainment in local labor markets that house import-competing manufacturing industries. Based on an approach to consider both treatment and selection effects, I conclude that rising imports could simultaneously lead to increased school attendance and increased emigration of college-educated workers.