The China Syndrome: Local Labor Market Effects of Import Competition in the United States
We analyze the effect of rising Chinese import competition between 1990 and 2007 on local U.S. labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization while instrumenting for imports using changes in Chinese imports by industry to other high-income countries. Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in exposed labor markets.
We thank Daron Acemoglu, Arnaud Costinot, Dave Donaldson, Robert Lawrence, Isaac Mbiti, Guy Michaels, Robert Staiger, John Van Reenen, Jonathan Vogel, Su Wang, and numerous seminar and conference participants for valuable suggestions that improved the paper. Autor acknowledges funding from the National Science Foundation (SES-0239538). Dorn acknowledges funding from the Spanish Ministry of Science and Innovation (CSD2006-00016 and ECO2010-16726) and from the Community of Madrid (S2007/HUM-0444). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
David H. Autor
I have written policy overview papers for the following non-profit organizations that may have a policy interest in the contents of the current paper:
a. Brookings Institution: The Hamilton Project
b. The Center for American Progress
I have served as an academic advisor to the Singaporean Ministry of Trade and Industry
David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-68, October. citation courtesy of