Import Competition and Internal Migration

Abstract

We examine the U.S. internal migration response to increased import competition following the granting of Permanent Normal Trade Relations to China in 2001. Using a variety of data sets and empirical approaches, we find that local labor markets most exposed to the policy change experienced a relative reduction in population growth over the following decade. The majority of the effect occurs at a lag of seven to ten years and is most pronounced among young individuals and low-education groups. Such population adjustments should influence the interpretation of evidence in the growing literature on import competition and local labor markets.

General Equilibrium Effects in Space: Theory and Measurement

“…We first analyze the importance of the baseline controls. While the wage responses are not sensitive to the control set, the estimated employment responses are larger and more precise when we control for the lagged population growth, as in Greenland et al (2019). 32 In addition, results are qualitatively similar when we compute z ij (i) with other distance parameters δ ∈ (1, 8), (ii) without CZ size, and (iii) only with CZs in the same state.…”

“…We also include controls for the CZ's exposure to the secular manufacturing decline in the period: the CZ's spending and employment shares in manufacturing (y 0 i,M and ξ 0 i,M ), as well as the weighted average of these shares across other CZs, j =i z ij y 0 j,M and j =i z ij ξ 0 j,M . Finally, we follow Greenland et al (2019) by including the CZ's lagged population growth to absorb the effect of persistent confounding shocks. 30 Donaldson and Hornbeck (2016) rely on a similar specification to compute a proxy for their market access measure in partial equilibrium.…”

“…In a setting with a representative household deciding the number of hours worked, this arises from the fact that a higher wage affects labor supply only through changes in the opportunity cost of leisure (i.e., the real wage), whereas a lower price index has ambiguous effects on labor supply because it increases both the real wage and the real value of lump-sum transfers. In a setting with heterogeneous individuals in terms of disutility to work, the labor supply function emerges from the comparison between the nominal wage and the home sector's payoff in each region and, therefore, it is not a direct function of the region's price index.35Greenland et al (2019) find that, in response to the China shock, population responses are weak for all working-age individuals, but are much stronger among young individuals aged below 30 years old. Our results are also consistent with the evidence in Cadena andKovak (2016) who find weak migration responses of U.S. native workers to regional labor demand shocks, especially for non-college graduates.…”

Cohort-Specific Experiences of Industrial Decline and Intergenerational Income Mobility

“…Scientific and journalistic accounts suggest that the economic deterioration initiated by manufacturing decline in traditional blue-collar communities is associated with the rise of "deaths of despair" from alcohol, drugs, and suicide (Case and Deaton 2015;Monnat 2019;Venkataramani et al 2020). In a similar line of inquiry, researchers have also documented how the rearrangement of opportunities in the U.S. labor market has contributed to shifts in other demographic processes, including fertility behavior and migration patterns, vis-à-vis increases in economic insecurity (Charles, Hurst, and Notowidigdo 2018;Greenland, Lopresti, and Mchenry 2019;Seltzer 2019).…”

Did U.S. Politicians Expect the China Shock?

“…Among the others, seeGreenland and Lopresti (2016),Feler and Senses (2017),Autor et al (2019),Greenland et al (2019),Autor et al (2019) andAutor et al (2020a).2 The role of electoral constituencies and subconstituencies in driving the behavior of members of Congress has played a central role in the analysis of policy support in Washington at least sinceFenno (1978);Peltzman (1984). See alsoMian et al (2010Mian et al ( , 2014 for more recent applications.…”