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

Author

Listed:
  • Céline Poilly

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Fabien Tripier

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

This short paper provides U.S. 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 margins 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 which are more specialized in goods industries, when they face higher uncertainty, tends 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," Post-Print hal-05099742, HAL.
    • Handle: RePEc:hal:journl:hal-05099742
    DOI: 10.1257/pandp.20251009
    Note: View the original document on HAL open archive server: https://hal.science/hal-05099742v1
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    References listed on IDEAS

    as
    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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    Keywords

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    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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