Trade and Structural Change: Focusing on the Specifics

Abstract

Using a newly digitized database encompassing the universe of tariff lines across five US trade policy regimes between 1900 and 1940, we show that price dynamics combine with industry reliance on specific tariffs to generate large swings in average tariff levels. Intra-policy variation in tariffs is strongly predictive of import growth throughout our sample. Using linked Census data, we quantify the effects of imports on structural change in this era. We find that import growth decreases labor force participation and inhibits the transition into the expanding manufacturing and service sectors, especially among the young.

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