Local Labor Market Effects of the 2002 Bush Steel Tariffs

75 Pages Posted: 15 Sep 2022

See all articles by James Lake

James Lake

University of Tennessee, Knoxville

Ding Liu

Southern Methodist University (SMU)

Date Written: 2022

Abstract

President Bush imposed safeguard tariffs on steel in early 2002. Using US input-output tables and a generalized difference-in-difference methodology, we analyze the local labor market employment effects of these tariffs depending on the local labor market’s reliance on steel as an input and as part of local production. The tariffs did not boost local steel employment but substantially depressed local employment in steel-consuming industries for many years after Bush removed the tariffs. The tariffs also led to a persistent exit of steel-intensive manufacturing establishments, suggesting a role for plant-level fixed entry costs in translating the temporary shock into persistent outcomes.

Keywords: Bush steel tariffs, safeguard tariffs, local labor markets, intermediate inputs, downstream, steel-consuming

JEL Classification: F130, F140, F160

Suggested Citation

Lake, James and Liu, Ding, Local Labor Market Effects of the 2002 Bush Steel Tariffs (2022). CESifo Working Paper No. 9909, Available at SSRN: https://ssrn.com/abstract=4215028 or http://dx.doi.org/10.2139/ssrn.4215028

James Lake (Contact Author)

University of Tennessee, Knoxville

Ding Liu

Southern Methodist University (SMU)

6212 Bishop Blvd.
Dallas, TX 75275
United States

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