Monday, August 25, 2014

Chinese imports and U.S. manufacturing jobs

Continuing on the recent blog theme on why is the U.S. labor market doing so poorly in terms of jobs and wage growth, I came across this study by a team of highly respected MIT economists that looks carefully at the impact of growing imports from China.  The news is not good and, frankly, not surprising.  
Our central estimates suggest net job losses of 2.0 to 2.4 million stemming from the rise in import competition from China over the period 1999 to 2011. 
This study focused only on Chinese imports, missing out on the impact of imports from the likes of Bangladesh and Nicaragua.  

Take one dose of import competition, another of technological change, and yet another of reduced fluidity and you might very well have a very convincing explanation of why employment remains so low.  

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