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Trade Policy Uncertainty and the Labor Market: State-Level Evidence

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Listed:
  • Céline Poilly
  • Fabien Tripier

Abstract

This paper provides US state-level evidence regarding the effects of trade policy uncertainty on the labor market. We show that a higher exposure to trade policy uncertainty generates a contraction in total hours worked at the state level. The extensive margin of labor is the primary margin of employment adjustment. State-level employment is more strongly impacted by trade policy uncertainty in goods-producing industries, and more particularly in the durable goods industry. States that are more specialized in goods industries, when they face higher uncertainty, tend to postpone hiring by more, which explains the drop in total employment.

Suggested Citation

  • Céline Poilly & Fabien Tripier, 2025. "Trade Policy Uncertainty and the Labor Market: State-Level Evidence," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 172-176, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:172-76
    DOI: 10.1257/pandp.20251009
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    References listed on IDEAS

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    1. Gabriel Chodorow-Reich, 2019. "Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned?," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 1-34, May.
    2. Choi, Sangyup & Furceri, Davide & Yoo, Seung Yong, 2024. "Heterogeneity in the effects of uncertainty shocks on labor market dynamics and extensive vs. intensive margins of adjustment," Journal of Economic Dynamics and Control, Elsevier, vol. 162(C).
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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