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International Trade and Local Labor Markets: Are Foreign and Domestic Shocks Created Differently?

Author

Listed:
  • Partridge, Mark D.
  • Rickman, Dan
  • Olfert, M. Rose
  • Tan, Ying

Abstract

Despite the attention given to international trade in discussion and analysis of the economic struggles of many regions across the U.S., it is unclear whether international trade shocks impact local economies more and differently than shocks originating from within the domestic economy, thus requiring special policy attention. Therefore, using U.S. county-level data for 1990-2010, this study carefully constructs demand shocks to local economies, isolating international import and export impacts to assess whether trade shocks have different effects from domestic demand shocks. We examine a variety of economic indicators including population growth, employment rates, wage rates and poverty rates. The results suggest that international trade shocks have some different effects than overall domestic shocks, though public perception of trade appears to be more negative than reality. We also find that domestic shocks dominate international trade shocks in explaining variation in regional labor market outcomes over the entire period.

Suggested Citation

  • Partridge, Mark D. & Rickman, Dan & Olfert, M. Rose & Tan, Ying, 2013. "International Trade and Local Labor Markets: Are Foreign and Domestic Shocks Created Differently?," MPRA Paper 53407, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53407
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    File URL: https://mpra.ub.uni-muenchen.de/53407/1/MPRA_paper_53407.pdf
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    References listed on IDEAS

    as
    1. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2008. "Lost in space: population growth in the American hinterlands and small cities," Journal of Economic Geography, Oxford University Press, vol. 8(6), pages 727-757, November.
    2. Chiquiar, Daniel, 2008. "Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 74(1), pages 70-93, January.
    3. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The Geography of Trade and Technology Shocks in the United States," American Economic Review, American Economic Association, vol. 103(3), pages 220-225, May.
    4. Hartmut Egger & Udo Kreickemeier, 2017. "Firm Heterogeneity and the Labor Market Effects of Trade Liberalization," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 10, pages 265-306 World Scientific Publishing Co. Pte. Ltd..
    5. Robin Leichenko & Julie Silva, 2004. "International Trade, Employment and Earnings: Evidence from US Rural Counties," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 355-374.
    6. Partridge, Mark D. & Rickman, Dan S. & Ali, Kamar & Olfert, M. Rose, 2009. "Agglomeration spillovers and wage and housing cost gradients across the urban hierarchy," Journal of International Economics, Elsevier, vol. 78(1), pages 126-140, June.
    7. Robert Z. Lawrence & Lawrence Edward, 2010. "US Trade and Wages: The Misleading Implications of Conventional Trade Theory," Working Paper Series WP10-9, Peterson Institute for International Economics.
    8. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
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    11. Mark D. Partridge & Dan S. Rickman & Kamar Ali, 2008. "Recent Immigration and Economic Outcomes in Rural America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(5), pages 1326-1333.
    12. Ivan T. Kandilov, 2009. "The Effects Of Trade With Developing Countries On The Regional Demand For Skill In The U.S.: Evidence From County Data," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 459-482.
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    Citations

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    Cited by:

    1. Rickman, Dan S. & Wang, Hongbo, 2018. "Two tales of two U.S. states: Regional fiscal austerity and economic performance," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 46-55.
    2. Malgouyres, Clément, 2014. "Chinese imports competition’s impact on employment and the wage distribution: evidence from French local labor markets," Economics Working Papers ECO2014/12, European University Institute.

    More about this item

    Keywords

    Regional Labor Markets; International Trade; Local Labor Markets;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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