When Protectionism Kills Talent

Fisher College of Business Working Paper No. 2024-03-007

Charles A. Dice Center Working Paper No. 2024-07

88 Pages Posted: 27 Mar 2024 Last revised: 3 Oct 2024

See all articles by Mehmet Canayaz

Mehmet Canayaz

Pennsylvania State University - Smeal College of Business

Isil Erel

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Umit G. Gurun

University of Texas at Dallas

Yufeng Wu

Ohio State University (OSU)

Multiple version iconThere are 2 versions of this paper

Date Written: October 03, 2024

Abstract

 We examine the repercussions of protectionist policies implemented in the United States since 2018 on the composition of workforce and career choices within the semiconductor industry. We find that the shift towards protectionism, aimed at reviving domestic manufacturing and employment, paradoxically resulted in a significant drop in hiring domestic talent. The effect is stronger for entry-level and junior positions, indicating a disproportionate impact on newcomers to the workforce. Additionally, we trace the trajectories of undergraduate and graduate cohorts possessing chip-related skills over time, and document significant shifts away from the chip industry. These findings are consistent with our model in which  protectionist policies affect labor markets through revenue, uncertainty, and substitution channels, potentially leading to decreased hiring of both domestic and foreign workers. Our findings highlight the challenges in achieving the goals of initiatives like the 2022 CHIPS and Science Act, emphasizing the need to address talent shortages to sustain the semiconductor industry's intended growth.

Keywords: Economic nationalism, Workforce, Chip, Protectionism, Tariff, Career

JEL Classification: F16, J21, J23, O3, L1, G15

Suggested Citation

Canayaz, Mehmet and Erel, Isil and Gurun, Umit G. and Wu, Yufeng, When Protectionism Kills Talent (October 03, 2024). Fisher College of Business Working Paper No. 2024-03-007, Charles A. Dice Center Working Paper No. 2024-07, Available at SSRN: https://ssrn.com/abstract=4773403 or http://dx.doi.org/10.2139/ssrn.4773403

Mehmet Canayaz (Contact Author)

Pennsylvania State University - Smeal College of Business ( email )

University Park, PA 16802
United States

Isil Erel

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Umit G. Gurun

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

HOME PAGE: http://www.umitgurun.com

Yufeng Wu

Ohio State University (OSU) ( email )

812 Fisher Hall
2100 Neil Ave
Columbus, OH 43210
United States
43210 (Fax)

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