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The China Syndrome: Local Labor Market Effects of Import Competition in the United States

  • David H. Autor
  • David Dorn
  • Gordon H. Hanson

We analyze the effect of rising Chinese import competition between 1990 and 2007 on local U.S. labor markets, exploiting cross-market variation in import exposure stemming from initial differences in industry specialization while instrumenting for imports using changes in Chinese imports by industry to other high-income countries. Rising exposure increases unemployment, lowers labor force participation, and reduces wages in local labor markets. Conservatively, it explains one-quarter of the contemporaneous aggregate decline in U.S. manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in exposed labor markets.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18054.

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Date of creation: May 2012
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Publication status: published as David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-68, October.
Handle: RePEc:nbr:nberwo:18054
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