The Impact of Chinese Trade on U.S. Employment: The Good, The Bad, and The Apocryphal

The Impact of Chinese Trade on U.S. Employment: The Good, The Bad, and The Apocryphal. Nicholas Bloom, Kyle Handley, André Kurmann, and Philip Luck. March 19, 2019. https://d101vc9winf8ln.cloudfront.net/documents/30626/original/BHKL_3-20-19_v2.pdf?1554902707

Abstract: Using Census micro data we find that the impact of Chinese import competition on US manufacturing had a striking regional variation. In high-human capital areas (for example, much ofthe West Coast or New England) most manufacturing job losses came from establishments industry switching to services. The establishment remained open but changed to research, design, management or wholesale. In the low human-capital areas (for example, much of the South and mid-West) manufacturing job-losses came from plant closure without much offsetting gain in service employment. Offshoring appears to drive these manufacturing job losses - the Chinese trade impact arose primarily in large importing firms that were simultaneously expanding service sector employment. Hence, our data suggest Chinese trade redistributed jobs from manufacturing in lower income areas to services in higher income areas. Finally, the impact of Chinese imports appear to have disappeared after 2007 – we find strong employment impacts from 2000 to 2007, but nothing since from2008 to 2015.