Cheap Imports and the Loss of U.S. Manufacturing Jobs

Abstract

This paper examines the role of international trade, and specifically imports from low-wage countries, in determining patterns of job loss in U.S. manufacturing industries between 1992 and 2007. Motivated by intuitions from factor-proportions-inspired work on offshoring and heterogeneous firms in trade, we build industry-level measures of import competition. Combining worker data from the Longitudinal Employer-Household Dynamics dataset, detailed establishment information from the Census of Manufactures, and transaction-level trade data, we find that rising import competition from China and other developing economies increases the likelihood of job loss among manufacturing workers with less than a high school degree; it is not significantly related to job losses for workers with at least a college degree.

Import competition from and offshoring to low-income countries: Implications for employment and wages at U.S. domestic manufacturers

“…In an analysis of more recent data, Cooke, Kemeny, and Rigby (2014) extend Bernard, Jensen, and Schott's (2006) analysis to study the impact of imports from low-income countries on U.S. manufacturing employment changes between 1992 and 2007, allowing for differential effects by worker skill levels. The authors find that workers with less than a high school degree experienced greater job losses due to low-income country import competition than did workers with at least a college degree.…”

The Effects of the Twin-Deficit Hypothesis: A Study Case for Romania

“…More precisely, their estimation indicates that the decline in U.S. manufacturing employment can be attributed to import competition from China, which accounts for 25% of the overall decrease. Cooke et al examine the impact of international trade, specifically imports from countries with low wages, on the occurrence of job losses in U.S. manufacturing sectors [25]. The authors ascertain that inexpensive imports, particularly from countries with low wages, are a contributing factor to the decline in manufacturing employment in the United States.…”