Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141507
Authors: 
Autor, David
Dorn, David
Hanson, Gordon H.
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9748
Abstract: 
China's emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and labor economists.
Subjects: 
labor market adjustment
trade
China
JEL: 
F16
H55
J23
J31
J63
Document Type: 
Working Paper

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