The Surprisingly Swift Decline of U.S. Manufacturing Employment

55 Pages Posted: 31 Jan 2014

See all articles by Justin R. Pierce

Justin R. Pierce

Board of Governors of the Federal Reserve System

Peter K. Schott

Yale University - School of Management; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Multiple version iconThere are 4 versions of this paper

Date Written: December 01, 2013

Abstract

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.

Suggested Citation

Pierce, Justin R. and Schott, Peter K., The Surprisingly Swift Decline of U.S. Manufacturing Employment (December 01, 2013). US Census Bureau Center for Economic Studies Paper No. CES-WP- 13-59, Available at SSRN: https://ssrn.com/abstract=2387599 or http://dx.doi.org/10.2139/ssrn.2387599

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