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

Authors: Nicholas Bloom, Kyle Handley, André Kurmann, and Philip Luck

Abstract: Using US Census microdata to examine the impact of Chinese imports the authors find three results. First, manufacturing job losses are more than offset with non-manufacturing job gains in areas with above average human capital (mainly the West and East coasts). Low human capital areas (mainly the South and Mid-West) saw larger job loss without a non-manufacturing offset. This suggests one reason the China shock polarized politics. Second, one-third of manufacturing job losses come from establishments switching into non-manufacturing. Consistent with a “Silicon Valley” story, firms offset manufacturing job loss with job creation in research, management, and marketing. Third, firms that are large, multinational, or importers generated most manufacturing job losses, but expanded operations in non-manufacturing – indicative of offshoring.

Philip Luck is an Assistant Professor of Economics in the Department of Economics at the University of Colorado Denver. His current research focuses on the effect of international trade on firm and labor dynamics as well as the role of market frictions in shaping the global organization of production. He holds a Ph.D. in Economics from the University of California, Davis.

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Sponsored by: Moynihan Institute of Global Affairs