The Surprisingly Swift Decline of U.S. Manufacturing Employment
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.
Schott thanks the National Science Foundation (SES-0241474 and SES-0550190) for research support. We thank Lorenzo Caliendo,Teresa Fort, Kyle Handley, Gordon Hanson, Marc Muendler, Mina Kim and seminar participants at numerous institutions for helpful comments. We also thank Jonathan Ende and Rebecca Hammer for helpful research assistance. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.SS Census Bureau, the Board of Governors or its research staff. All results have been reviewed to ensure that no confidential information is disclosed.
Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-62, July. citation courtesy of