Exchange Rates and Local Labor Markets

Linda Goldberg, Joseph Tracy

NBER Working Paper No. 6985
Issued in February 1999
NBER Program(s):   ITI   LS

We document the consequences of real exchange rate movements for the employment, hours, and hourly earnings of workers in manufacturing industries across individual states. Exchange rates have statistically significant wage and employment implications in these local labor markets. The importance and size of these dollar-induced effects vary considerably across industries and are more pronounced in some U.S. regions. In addition to the importance of exchange rate shocks, we confirm prior research results showing that relatively strong local conditions drive up wage in local industries, while anticipated future (positive) local shocks reduce current wages.

(246 K)

Published:

• The Impact of International Trade On Wages, Feenstra, Robert, ed.: Chicago: The University of Chicago Press and NBER, 2000. ,
• Exchange Rates and Local Labor Markets, Linda Goldberg, Joseph Tracy, in The Impact of International Trade on Wages (2000), University of Chicago Press
  

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