« Back to Results

On the Decline of Manufacturing Productivity Growth and Employment

Paper Session

Sunday, Jan. 7, 2018 1:00 PM - 3:00 PM

Pennsylvania Convention Center, 203-A
Hosted By: Labor and Employment Relations Association
  • Chair: Susan Houseman, W.E. Upjohn Institute for Employment Research

Investment Responses to Trade Liberalization: Evidence from U.S. Industries and Establishments

Justin Pierce
,
Federal Reserve Board
Peter Schott
,
Yale University

Abstract

We use matched employee-employer data to examine the impact of a change in U.S. trade policy on U.S. worker employment and wages. We find that manufacturing workers with greater direct exposure to the trade liberalization via their industry of employment experience longer spells of non-employment and larger reductions in cumulative earnings over the following decade. Greater indirect exposure via the industry structure of workers' counties induces similar outcomes.

Relative Prices, Hysteresis and the Decline of American Manufacturing

Douglas L. Campbell
,
New Economic School

Abstract

This study uses new measures of real exchange rates to study the collapse of US manufacturing employment in the early 2000s in historical and international perspective. To identify a causal impact of RER movements on manufacturing, I compare the US experience in the early 2000s to the 1980s, when large fiscal deficits led to a sharp appreciation of the dollar, and to Canada's experience in the mid-2000s, when high oil prices and a falling US dollar led to an equally sharp appreciation of the Canadian dollar. Using disaggregated sectoral data and a difference-in-difference methodology, I find that a temporary appreciation in relative unit labor costs for the US leads to persistent declines in employment, output, and productivity in relatively more open manufacturing sectors. The appreciation of US relative unit labor costs can plausibly explain more than two-thirds of the decline in manufacturing employment in the early 2000s.

Trade and Innovation — Comparing Evidence from Three Different Sources of Import Competition

David Autor
,
Massachusetts Institute of Technology
David Dorn
,
University of Zurich
Gordon H. Hanson
,
University of California-San Diego
Gary Pisano
,
Harvard University
Pian Shu
,
Harvard University

Abstract

TBD
Discussant(s)
Ann Harrison
,
University of Pennsylvania
J. Bradford DeLong
,
University of California-Berkeley
Nikolas Zolas
,
U.S. Census Bureau
JEL Classifications
  • A1 - General Economics