We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe...

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

In this essay, I begin by identifying the reasons that automation has not wiped out a majority of jobs over the decades and centuries. Automation does indeed substitute for laborâ��as it is typically intended to do. However, automation also complements labor, raises output in ways that leads to higher demand for labor, and interacts with adjustments in labor supply. Journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor. Changes in technology do alter the types of jobs available and what those jobs pay. In the last few decades, one noticeable change has been a "polarization" of the labor market, in which wage gains went disproportionately to those at the top and at the bottom of the income and skill distribution, not to those in the middle; however, I also argue, this polarization is unlikely to continue very far into future. The final section of this paper reflects on how recent and future advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth. I argue that the interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine, codifiable tasks while amplifying the comparative advantage of workers in supplying problem-solving skills, adaptability, and creativity.

https://www.aeaweb.org/articles/pdf/doi/10.1257/jep.29.3.3

Why Are There Still So Many Jobs? The History and Future of Workplace Automation

We examine the impact of Chinese import competition on broad measures of technical change—patenting, IT, and TFP—using new panel data across twelve European countries from 1996 to 2007. In particular, we establish that the absolute volume of innovation increases within the firms most affected by Chinese imports in their output markets. We correct for endogeneity using the removal of product-specific quotas following China's entry into the World Trade Organization in 2001. Chinese import competition led to increased technical change within firms and reallocated employment between firms towards more technologically advanced firms. These within and between effects were about equal in magnitude, and account for 14% of European technology upgrading over 2000–7 (and even more when we allow for offshoring to China). Rising Chinese import competition also led to falls in employment and the share of unskilled workers. In contrast to low-wage nations like China, developed countries had no significant effect on innovation.

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Trade Induced Technical Change? The Impact of Chinese Imports on innovation, IT and Productivity

We investigate the nature of selection and productivity growth in industries where we observe producer-level quantities and prices separately. We show there are important differences between revenue and physical productivity. Because physical productivity is inversely correlated with price while revenue productivity is positively correlated with price, previous work linking (rev- enue-based) productivity to survival confounded the separate and opposing effects of technical efficiency and demand on survival, understating the true impacts of both. Further, we find that young producers charge lower prices than incumbents. Thus the literature understates new producers' productivity advantages and entry's contribution to aggregate productivity growth. (JEL D24, L11, L25)

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Reallocation, Firm Turnover, and Efficiency : Selection on Productivity or Profitability?

/pdf/why-are-there-still-so-many-jobs-the-history-and-future-of-4kis748dvo.pdf

Why Are There Still So Many Jobs? The History and Future of Workplace

This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change. (JEL D72, E24, F13, F16, L24, L60, P33)

/pdf/the-surprisingly-swift-decline-of-u-s-manufacturing-1u74lgkw8c.pdf

The Surprisingly Swift Decline of U.S. Manufacturing Employment

This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy.

This paper provides and describes concordances between the ten-digit Harmonized System (HS) categories used to classify products in US international trade and the four-digit SIC and six-digit NAICS industries that cover the years 1989 to 2006 We also provide concordances between ten- digit HS codes and the five-digit SIC and seven-digit NAICS product classes used to classify US manufacturing production Finally, we briefly describe how these concordances might be applied in current empirical international trade research

A Concordance Between Ten-Digit U.S. Harmonized System Codes and SIC/NAICS Product Classes and Industries

We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, firms, establishments, and regions. These data provide support for both trade- and technology-based explanations of the overall decline of employment over this period, while also highlighting the difficulties of estimating an overall contribution for each mechanism. Toward that end, we discuss how more careful analysis of these trends might yield sharper insights.

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New Perspectives on the Decline of US Manufacturing Employment

The paper's objective is to explain factors underlying Africa's weak infrastructure endowment and to identify suitable infrastructure goals for the region based on benchmarking against international peers The authors use a dataset covering the stocks of key infrastructure-including information and communication technology (ICT), power, roads, and water-across 155 developing countries over the period 1960 to 2005 The paper also examines subregional differences within Africa They make use of regression techniques to control for a comprehensive set of economic, demographic, geographic, and historic conditioning factors, as well as adjusting for potential endogeneities Results show that Africa lags behind all other regions of the developing world in its infrastructure endowment, except in ICT By far the largest gaps arise in the power sector, with generating capacity and household access to electricity at half the levels observed in South Asia While it is often assumed that Africa's infrastructure deficit is largely a reflection of its relatively low income levels, the authors find that African countries have much more limited infrastructure than income peers in other parts of the developing world Countries that face the most challenging environment, with low population density, weak governance, and history of conflict, have the poorest infrastructure endowments At the outset of the data series, Africa was doing significantly better than other developing regions for road density, generation capacity, and fixed-line telephones, but Africa's relative position has deteriorated over time The most dramatic loss of ground has come in electrical generating capacity, which has stagnated since 1980

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Justin R. Pierce

Papers

The Surprisingly Swift Decline of U.S. Manufacturing Employment

The Surprisingly Swift Decline of U.S. Manufacturing Employment

A Concordance Between Ten-Digit U.S. Harmonized System Codes and SIC/NAICS Product Classes and Industries

New Perspectives on the Decline of US Manufacturing Employment

Making Sense of Africa’s Infrastructure Endowment : A Benchmarking Approach