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American Economic Review: Vol. 103 No. 6 (October 2013)

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

Article Citation

Autor, David H., David Dorn, and Gordon H. Hanson. 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States." American Economic Review, 103(6): 2121-68.

DOI: 10.1257/aer.103.6.2121

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.

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Download Data Set (2.74 MB) | Online Appendix (229.63 KB) | Author Disclosure Statement(s) (220.44 KB)

Authors

Autor, David H. (MIT)
Dorn, David (CEMFI, Madrid)
Hanson, Gordon H. (U CA, San Diego)

JEL Classifications

E24: Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
F14: Empirical Studies of Trade
F16: Trade and Labor Market Interactions
L60: Industry Studies: Manufacturing: General
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
R12: Size and Spatial Distributions of Regional Economic Activity
R23: Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics


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