U.S. Job Flows and the China Shock

Working Paper No. 24080 International trade exposure affects job creation and destruction along the intensive margin (job flows due to expansions and contractions of firms' employment) as well as along the extensive margin (job flows due to births and deaths of firms). This paper uses 1992-2011...

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Bibliographic Details
Published in:NBER Working Paper Series 2017-11, p.24080
Main Authors: Asquith, Brian J, Goswami, Sanjana, Neumark, David, Rodriguez-Lopez, Antonio
Format: Article
Language:English
Subjects:
Births
Careers
Commuting
Economic models
Economic theory
Employment
International trade
Job creation
Labor market
Manufacturing
Normal trade relations
Trade liberalization
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Summary:Working Paper No. 24080 International trade exposure affects job creation and destruction along the intensive margin (job flows due to expansions and contractions of firms' employment) as well as along the extensive margin (job flows due to births and deaths of firms). This paper uses 1992-2011 employment data from the {universe} of U.S. establishments to construct job flows at both the industry and commuting-zone levels, and then estimates the impact of the `China shock' on each job-flow type. The China shock is accounted for by either the increase in Chinese import penetration in the U.S., or by the U.S. policy change that granted Permanent Normal Trade Relations (PNTR) status to China. We find that the China shock affects U.S. employment mainly through deaths of establishments. At the commuting-zone level, we find evidence of large job reallocation from the Chinese-competition exposed sector to the nonexposed sector, and establish that the gross employment effects of the China shock are fundamentally different from those of a more general adverse shock affecting the U.S. demand for domestic labor.
ISSN:0898-2937
DOI:10.3386/w24080