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US Employment Deindustrialization: Insights from History and the International Experience

Author

Listed:
  • Robert Z. Lawrence

    (Harvard University and Peterson Institute for International Economics)

  • Lawrence Edwards

    (University of Cape Town)

Abstract

International factors, such as the dramatic increase in imports from emerging-market economies, especially China, have been widely blamed for the decline in manufacturing employment in the United States over the past decade. The authors argue, however, that far more important in causing that decline has been the slow overall growth in US employment and powerful historical forces that have affected all advanced economies: a combination of rapid productivity growth and demand that is relatively unresponsive to income growth and lower prices. To be sure, US manufacturing employment can grow in the short run. The labor content of the US manufacturing trade deficit remains significant and a vigorous US and global economic recovery could boost US manufacturing employment. Over the long run, however, absent new product innovations, or a shift in consumer preferences, the basic forces leading to declining manufacturing employment are unlikely to abate.

Suggested Citation

  • Robert Z. Lawrence & Lawrence Edwards, 2013. "US Employment Deindustrialization: Insights from History and the International Experience," Policy Briefs PB13-27, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb13-27
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. James Bessen, 2018. "Artificial Intelligence and Jobs: The Role of Demand," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 291-307, National Bureau of Economic Research, Inc.
    2. Cáceres, Luis René, 2017. "Deindustrialization and economic stagnation in El Salvador," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Juan Esteban Carranza & Jesús Antonio Bejarano Rojas & Camila Casas & Alejandra Ximena Gonzalez-Ramirez & Stefany Moreno-Burbano & Fernando Arias-Rodríguez & Juan Sebastián Vélez-Velásquez, 2018. "La industria colombiana en el siglo XXI," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, issue 87, pages 1-69, November.
    4. Murat A. Yülek, 2017. "On the Middle Income Trap, the Industrialization Process and Appropriate Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 325-348, September.
    5. Robert Z. Lawrence, 2017. "Recent Manufacturing Employment Growth: The Exception That Proves the Rule," NBER Working Papers 24151, National Bureau of Economic Research, Inc.
    6. Ghulam, Yaseen, 2021. "Institutions and firms’ technological changes and productivity growth," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    7. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    8. Susan N. Houseman & Brad J. Hershbein, 2018. "Understanding the Decline of U.S. Manufacturing Employment," Upjohn Working Papers and Journal Articles 18-287, W.E. Upjohn Institute for Employment Research.
    9. Herr, Hansjörg, 2018. "Underdevelopment and unregulated markets: Seven reasons why unregulated markets reproduce underdevelopment," IPE Working Papers 103/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    10. Robert Z. Lawrence, 2017. "Recent US Manufacturing Employment: The Exception that Proves the Rule," Working Paper Series WP17-12, Peterson Institute for International Economics.
    11. Ghulam Yahya Khan & Salik Mehboob & Lydia Bares Lopez, 2018. "Deindustrialization and Economic Growth: Empirical Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 462-475, December.

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