1. U.S. Job Flows and the China Shock
Abstract: International trade exposure affects job flows along the intensive margin (from expansions and contractions of firms' employment) as well as along the extensive margin (from births and deaths of firms). This paper uses 1992–2011 employment data from U.S. establishments to construct job flows at both the industry and commuting-zone levels, and then estimates the impact of the ‘China shock’ on each job-flow type. Using the two most influential measures of Chinese exposure, we find that the China shock affects U.S. employment mainly through deaths of establishments. At the commuting-zone level, we find evidence of large job reallocation from the Chinese-competition exposed sector to the nonexposed sector. Moreover, we demonstrate that the job-flow effects of the China shock are fundamentally different from those of a more general adverse shock affecting the U.S. demand for domestic labor.
2. Chinese Import Exposure and U.S. Occupational Employment
Abstract: Import competition has heterogenous impacts across occupations. This paper estimates the effects of import exposure from China on employment in U.S. occupations from 2002 to 2014. After obtaining occupation-specific measures of Chinese import exposure and sorting occupations in tertiles from low to high wage, from routine to non-routine, and from low to high education, we find that Chinese import competition reduces employment in lower-indexed occupations under each sorting criteria. The employment reduction in the lowest tertile of occupations occurs in Chinese-trade exposed and unexposed sectors, which suggests the existence of local labor market effects in the presence of a strong regional concentration of lower-indexed occupations.
Working Papers and Research in Progress
1. Employment Consequences of U.S. Trade Wars
Abstract: This paper provides evidence on the short-run and long-run distributional effects of tariff shocks on employment in the United States. Using monthly data on tariffs and employment, I find that in the period of January 2017 to March 2019, commuting zones more exposed to Chinese retaliatory tariffs experienced a decline in employment growth, whereas U.S. import tariffs had no immediate effect on employment growth. I also study the employment effects of a hypothetical trade war between the United States and China by calculating counterfactual employment changes under three different retaliation scenarios and find that had the U.S. imposed tariffs in the 1991-2007 period on all products, the large job-destroying effect of the `China shock' would not have occurred, irrespective of the retaliation strategy pursued by China. However in the post-recession period of 2010-2016, the `China shock' no longer exists and therefore U.S. import tariffs would not have had a job-creating effect. This result corroborates the findings of the short-run analysis.
2. Markups and Productivity of Heterogeneous Producers
Abstract: This paper tests important empirical predictions from international trade models linking trade behavior and firms' markups using firm-level panel data for U.S. manufacturing firms from 1964-2011, producing the following results: firms of higher productivity have lower rates of exchange rate pass-through to export prices, i.e., they adjust their markups by a higher magnitude. However, firms of higher productivity also have less volatile markups, i.e, they adjust their markups less frequently than do firms of lower productivity. Such heterogeneous and complex firm behavior may be the reason why we are unable to explain the lack of response of aggregate prices to exchange rate movements.
1. A Closer Look at Labor Productivity in Canada