NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Surprisingly Swift Decline of U.S. Manufacturing Employment

Justin R. Pierce, Peter K. Schott

NBER Working Paper No. 18655
Issued in December 2012
NBER Program(s):   ITI

This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy.

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This paper was revised on January 3, 2014

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Document Object Identifier (DOI): 10.3386/w18655

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