Transcript The Surprisingly Swift Decline of U.S. Manufacturing Employment Justin R. Pierce Board of Governors of the Federal Reserve System Peter K.

The Surprisingly Swift Decline of U.S.
Manufacturing Employment
Justin R. Pierce Board of Governors of the Federal Reserve System
Peter K. Schott Yale School of Management & NBER
Disclaimer
Any opinions and conclusions expressed herein are those of the
authors and do not necessarily represent the views of the U.S.
Census Bureau, the Board of Governors or its research staff. All
results have been reviewed to ensure that no confidential information
is disclosed.
2
Post-War U.S. Manufacturing Employment
U.S. Manufacturing Employment
16
14
12
Employment (Million)
18
20
NBER Recessions Shaded
1948
1958
1968
1978
1988
1998
2008
3
Post-War U.S. Manufacturing Employment
U.S. Manufacturing Employment
16
14
12
Employment (Million)
18
20
NBER Recessions Shaded
1948
1958
1968
1978
1988
1998
2008
4
Post-War U.S. Manufacturing Employment
U.S. Manufacturing Employment
16
14
-2.9 mill over 3 years
12
Employment (Million)
18
20
NBER Recessions Shaded
1948
1958
1968
1978
1988
1998
2008
5
Post-War U.S. Manufacturing Employment
U.S. Manufacturing Employment
16
14
-2.9 mill over 3 years
12
Employment (Million)
18
20
NBER Recessions Shaded
1948
1958
1968
1978
1988
1998
2008
6
Introduction
• We link the post-2001 decline in US manufacturing employment to
China’s receipt of Permanent Normal Trade Relations (PNTR)
• PNTR did not change actual tariff rates
– Chinese imports were eligible for low NTR rates starting in 1980
– But access to these rates required annual renewal by Congress
– Without renewal, tariffs would rise to higher, Smoot-Hawley levels
• With PNTR, the possibility of tariff hikes was eliminated
• Pre-PNTR uncertainty over possible tariff hikes likely discouraged
– US firms from investing in trade relationships with Chinese firms
– US firms from openings plants in China
– U.S. firms from investing in labor-saving technologies
– Chinese firms from making investments to export to US
7
Before Continuing…
U.S. Manufacturing
Employment vs Log Real Value Added
20
Real Value Added (Billion)
1600
18
16
14
12
800
400
10
Despite the sharp decline in
employment after 2001, real value
added continues rising at its
historical pace
200
1948
1958
1968
BLS Employment
1978
year
1988
1998
2008
BEA Real Value Added
8
Outline
• US-China Trade Policy
• Census Data
• Main results
• Mechanisms
• Conclusion
9
US NTR and Non-NTR Tariffs
•
NTR = Normal Trade Relations
– Synonym for Most Favored Nation (MFN)
• The US has two basic tariff schedules
– NTR tariffs
: for WTO members; generally low
– Non-NTR tariffs : for non-market economies; generally high; set
by Smoot-Hawley (1930)
• How does China fit into these categories?
10
US-China Trade Policy, 1980-2001
2001 (December)
China enters WTO
Annual renewals of MFN status were uncertain
1980 (February)
China was granted temporary
NTR status by the US
Congress
Temporary NTR requires
annual re-approval by
Congress
2000 (October)
U.S. Congress grants
China PNTR, eliminating
the risk that a failed vote
might lead to a jump in
tariffs
11
Plausible Mechanism?
“U.S. companies expect to benefit from billions of dollars in new business and an end to years of
uncertainty in which they had put off major decisions about investing in China.
NYT 2000.9.20
“[P]rivate sector officials cited uncertainty surrounding the annual renewal of China’s most-favored-nation
trade status as the single most important issue affecting U.S. trade relations with China….[T]he great
majority of the U.S. business associations and companies… contacted told us that the annual uncertainty
surrounding China’s MFN status potentially hinders their business activities in China.”
US GAO 1994.5.4
“While the risk that the United States would withdraw NTR status from China may be small, if it did occur
the consequences would be catastrophic for U.S. toy companies given the 70 percent non-MFN U.S. rate
of duty applicable to toys.”
Testimony of Thomas F. St. Maxens (Mattel)
Ways and Means Committee 2000.2.16
“In the months since the enactment of [PNTR] there has been an escalation of production shifts out of the
U.S. and into China. According to our media-tracking data, between October 1, 2000 and April 30, 2001
more than eighty corporations announced their intentions to shift production to China, with the number of
announced production shifts increasing each month from two per month in October to November to
nineteen per month by April.”
Bronfenbrenner et al. (2001.6.30)
U.S.-China Security Review Commission
The “NTR Gap”
i=industry
• Define the difference between the non-NTR and NTR rates as
NTR Gapi = Non-NTR Tariffi – NTR Tariffi
• Calculated using tariff-line (HS8) data from Feenstra et al. (2003)
– Use tariffs for 1999, the year before PNTR
– Gap for industry i is the mean across tariff lines in industry i
13
Distribution of NTR Gap
4
Distribution of 1999 NTR Gap
•
89 percent of the variation in the NTR
gap across industries arises from
variation in non-NTR rates, which were
set in 1930
•
The higher the NTR gap, the greater
the industry’s exposure to potential
tariff increases before PNTR
2
1
0
Density
3
Mean: 0.32
Std:
0.15
0
.2
.4
.6
.8
14
Preview of Results
• Divide U.S. manufacturing industries or import products into two
groups based on whether their NTR gap is above or below the median
• Plot their trajectory before and after PNTR
15
Preview of Findings – Employment
Public NBER-CES Data
U.S. Manufacturing Employment
According to Industries with Low vs High 1999 NTR Gaps
1.2
•
Before PNTR: high- and low-gap
industries follow roughly parallel
trends
•
Post PNTR: employment falls more
sharply among high-gap industries
•
Note: we use the NTR gap as a
continuous variable in our
regression analysis.
2001=1
1.1
1
.9
.8
1981
1986
1991
Below Median NTR Gap
1996
2001
2006
Above Median NTR Gap
16
Preview of Findings – Trade
Public Census Trade Data
U.S. Imports Excluding Natural Resources
3
U.S. Census Bureau Foreign Trade Data
Imports from China in the moreexposed products jump after PNTR
0
1
2001=1
2
•
1991
1993
1995
1997
1999
year
2001
2003
2005
2007
China: Below Mean
China: Above Mean
17
Preview of Findings – Trade
Public Census Trade Data
U.S. Imports Excluding Natural Resources
3
U.S. Census Bureau Foreign Trade Data
China
Imports from China in the moreexposed products jump after PNTR
•
This trend is not present in imports
from rest-of-world (ROW)
2001=1
2
•
0
1
ROW
1991
1993
1995
1997
1999
year
China: Below Mean
China: Above Mean
2001
2003
2005
2007
ROW: Below Mean
ROW: Above Mean
18
Preview of Findings – Trade
Public Census Trade Data
U.S. Imports Excluding Natural Resources
3
U.S. Census Bureau Foreign Trade Data
China
Imports from China in the moreexposed products jump after PNTR
•
This trend is not present in imports
from rest-of-world (ROW)
•
Below, we use census data to
examine margins of adjustment
•
New US importers
•
New Chinese Exporters
•
New Importer-exporter pairs
2001=1
2
•
0
1
ROW
1991
1993
1995
1997
1999
year
China: Below Mean
China: Above Mean
2001
2003
2005
ROW: Below Mean
ROW: Above Mean
2007
19
Related Research
• Employment and trade liberalization
– Lots of papers
– China: Autor et al. (2013); Bloom et al. (2015)
• Investment under uncertainty
– Lots of papers
– Trade: Handley (2014); Handley and Limao (2014a, 2014b)
• “Jobless” recoveries
– Manufacturing: Faberman (2012)
• Supply-chain linkages
– US manufacturing: Ellison, Glaeser and Kerr (2010)
– Trade: Baldwin and Venables (2013)
20
Outline
• US-China Trade Policy
• Census Data
• Main results
• Mechanisms
• Conclusion
21
Census Data
• LBD
–
–
–
• Longitudinal Business Databse
– Employment of all U.S. establishments
– Annual data but limited information
– Concordance issue
• CM
–
• Census of Manufactures
– Employment + other attributes for all
manufacturing establishments, 1992(5)2007
– Lots of information but low frequency
–
• LFTTD
• Transaction-level US import data
– Value
– U.S. importer and foreign exporter ID’s
22
Outline
• US-China Trade Policy
• Data
• Main results
• Mechanisms
• Conclusion
23
Empirical Strategy
i=industry; t=year
• DID specification
– Regress industry-year employment from 1990-2007 on interaction
of NTR Gap and indicator for post-PNTR period (year>2000)
– Add covariates that account for
• Industry characteristics
• Other policy changes (MFA, China’s entry into WTO, etc.)
24
Empirical Strategy
i=industry; t=year
• DID specification
– Regress industry-year employment from 1990-2007 on interaction
of NTR Gap and indicator for post-PNTR period (year>2000)
– Add covariates that account for
• Industry characteristics
• Other policy changes (MFA, China’s entry into WTO, etc.)
Industry and
year FE.
Time-Invariant
Initial K/L,
Changes in
Chinese import
tariffs, etc.
Time-Varying
E.g., MFA,
NTR rate, etc.
25
Baseline Results (LBD)
Post x NTR Gapi
Post x ln(K/Empi,1990 )
Post x ln(NP/Empi,1990 )
Post x Contract Intensityi
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi}
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
ln(Empit)
ln(Empit)
ln(Empit)
-0.714 ***
-0.601 ***
-0.469 ***
0.193
0.191
0.147
0.037
-0.016
0.031
0.025
0.081
0.132 ***
0.054
0.053
-0.181
0.112
-0.244 *
0.140
0.063
0.088
-0.238
0.164
-0.036
0.045
-0.342 ***
0.060
-0.455
0.670
-0.123
0.203
5,706
5,706
5,706
0.98
0.98
0.99
i,t
i,t
i,t
Yes
Yes
Yes
-0.229
-0.193
-0.151
26
Baseline Results (LBD)
Post x NTR Gapi
Post x ln(K/Empi,1990 )
Post x ln(NP/Empi,1990 )
Post x Contract Intensityi
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi}
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
ln(Empit)
ln(Empit)
ln(Empit)
-0.714 ***
-0.601 ***
-0.469 ***
0.193
0.191
0.147
0.037
-0.016
0.031
0.025
0.081
0.132 ***
0.054
0.053
-0.181
0.112
-0.244 *
0.140
0.063
0.088
-0.238
0.164
-0.036
0.045
-0.342 ***
0.060
-0.455
0.670
-0.123
0.203
5,706
5,706
5,706
0.98
0.98
0.99
i,t
i,t
i,t
Yes
Yes
Yes
-0.229
-0.193
-0.151
Industries with higher NTR gaps
experience larger employment declines
following PNTR
27
Baseline Results (LBD)
Post x NTR Gapi
Post x ln(K/Empi,1990 )
Post x ln(NP/Empi,1990 )
Post x Contract Intensityi
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi}
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
ln(Empit)
ln(Empit)
ln(Empit)
-0.714 ***
-0.601 ***
-0.469 ***
0.193
0.191
0.147
0.037
-0.016
0.031
0.025
0.081
0.132 ***
0.054
0.053
-0.181
0.112
-0.244 *
0.140
0.063
0.088
-0.238
0.164
-0.036
0.045
-0.342 ***
0.060
-0.455
0.670
-0.123
0.203
5,706
5,706
5,706
0.98
0.98
0.99
i,t
i,t
i,t
Yes
Yes
Yes
-0.229
-0.193
-0.151
Industries with higher NTR gaps
experience larger employment declines
following PNTR
Economic significance: for each industry,
compute the implied effect of PNTR (vs
the pre-period) relative to a hypothetical
industry with a zero NTR gap
28
Baseline Results (LBD)
Post x NTR Gapi
Post x ln(K/Empi,1990 )
Post x ln(NP/Empi,1990 )
Post x Contract Intensityi
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi}
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
ln(Empit)
ln(Empit)
ln(Empit)
-0.714 ***
-0.601 ***
-0.469 ***
0.193
0.191
0.147
0.037
-0.016
0.031
0.025
0.081
0.132 ***
0.054
0.053
-0.181
0.112
-0.244 *
0.140
0.063
0.088
-0.238
0.164
-0.036
0.045
-0.342 ***
0.060
-0.455
0.670
-0.123
0.203
5,706
5,706
5,706
0.98
0.98
0.99
i,t
i,t
i,t
Yes
Yes
Yes
-0.229
-0.193
-0.151
Not much action in terms of the other
covariates, except for skill intensity,
changes in Chinese import tariffs and the
MFA phase-out
29
Timing (LBD)
• The NTR gap should be correlated with employment after PNTR but
not before
30
Timing (LBD)
• Plot the 95% confidence interval of the annual DID coefficients for two
specifications: no additional controls versus baseline controls
Estimated 90% Confidence Interval for DID Coefficients
-1.5
-1
-.5
0
.5
Equation 3
1991
1993
1995
1997
1999
Baseline Controls
2001
2003
2005
2007
No Controls
31
Linearity (LBD)
0
Implied Non-Linear Relationships
There is some support for the idea
that employment loss accelerates
with the NTR gap
•
The implied impacts from these
specifications, however, are similar
to those in the baseline
specification
-.8
-.6
-.4
-.2
•
0
.2
Linear
.4
NTR Gap
Quadratic
.6
Cubic
.8
Spline
32
US vs EU (UNIDO)
i=industry, t=year, c=country
• In contrast to the United States, the EU granted permanent mostfavored-nation status to China in 1980
• We compare employment in the two regions via a triple DID
33
US vs EU (UNIDO)
i=industry, t=year, c=country
• In contrast to the United States, the EU granted permanent mostfavored-nation status to China in 1980
• We compare employment in the two regions via a triple DID
34
US vs EU (UNIDO)
i=industry, t=year, c=country
• In contrast to the United States, the EU granted permanent mostfavored-nation status to China in 1980
• We compare employment in the two regions via a triple DID
ln(Empit)
Post x NTR Gapi x 1{c=US}
Post x NTR Gapi
Observations
R2
Fixed Effects
Employment Weighted
-0.665 ***
0.261
0.016
0.109
1831
0.94
i,t
Yes
ln(Empit)
0.016
0.112
999
0.99
i,t
Yes
ln(Empit)
-0.649 ***
0.270
832
0.98
i,t
Yes
Notes: Each column displays the results of an industry-level OLS generalized difference-indifferences regression of the log employment on industry (i) and year (t) fixed effects and
covariates discussed in text. Data span 1998 and 2005. Interactions required to identify the
triple difference-in-differences term are suppressed. Robust standard errors adjusted for
clustering at the industry level are displayed below each coefficient. Observations are
weighted by initial employment. Superscripts ***, ** and * represent statistical significance at
the 1, 5 and 10 percent levels.
35
Outline
• US-China Trade Policy
• Data
• Main result
• Mechanisms
• Conclusion
36
Mechanisms
• U.S. Imports
• Chinese Exports
• U.S. factor intensity
• Input-Output Linkages
37
U.S. Imports (LFTTD)
h=product, c=country, t=year
• Compare products with varying NTR gaps (first difference) before and
after PNTR (second difference) and across source countries (third
difference) for the years 1992 to 2007
where Ohct represents one of
– Import value
Interactions
needed to
– Number of U.S. importers
identify q
– Number of Chinese exporters
– Number of importer-exporter pairs
Time-Varying
Exchange rate
and NTR rate
Fixed
Effects
38
U.S. Imports (LFTTD)
h=product, c=country, t=year
• Compare products with varying NTR gaps (first difference) before and
after PNTR (second difference) and across source countries (third
difference) for the years 1992 to 2007
1{c=China} x Post x NTR Gap h
ln(Exchange Rate ct)
ln(NTRht)
Observations
R2
Fixed Effects
Implied Impact of PNTR
ln(Value hct)
0.502 ***
0.122
0.017 **
0.008
0.107 ***
0.018
1,436,526
0.38
h,c,t
0.17
ln(Importershct)
0.437 ***
0.062
0.047 ***
0.003
0.078 ***
0.007
1,436,526
0.49
h,c,t
0.14
ln(Exportershct)
0.517 ***
0.071
0.042 ***
0.004
0.089 ***
0.008
1,436,526
0.48
h,c,t
0.17
ln(Pairshct)
0.509 ***
0.074
0.041 ***
0.004
0.096 ***
0.008
1,436,526
0.47
h,c,t
0.17
39
Chinese Exports (NBS)
h=product, c=country, t=year
• Similar to U.S. imports but using Chinese transaction-level trade data
from the China National Bureau of Statistics (NBS)
– Firm x six-digit HS x year
• Can observe export “type”
– General
– Processing & Assembly
• Can observe firm ownership type
– SOE
– Private domestic
– Private foreign
40
Chinese Exports (NBS)
h=product, c=country, t=year
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
All Firms
All Exports
General Exports
ln(V hct)
ln(V hct)
0.470 ***
0.654 ***
0.168
0.172
1,254,502
1,208,169
0.47
0.44
h,c,t
h,c,t
SOEs
ln(V hct)
0.300 *
0.175
1,062,941
0.43
h,c,t
All Exports
Domestic
ln(V hct)
1.637 ***
0.511
558,821
0.41
h,c,t
P&A Exports
ln(V hct)
0.370 *
0.222
381,410
0.46
h,c,t
Foreign
ln(V hct)
0.908 ***
0.253
569,022
0.42
h,c,t
Notes: Table reports results of product-country-year level generalized triple difference-in-differences
OLS regressions of log Chinese export value on noted triple difference-in-differece term as well as
product (h), country (c) and year (t) fixed effects. Results for fixed effects as well as all other terms
required to identify the triple difference-in-differences term of interest are suppressed. Data span
2000 to 2005. Robust standard errors adjusted for clustering at the product level are displayed below
each coefficient. All exports are defined as the sum of general and processing & assembly (P&A)
exports. All firms are the union of state-owned enterprises, privately owned domestic firms and
privately owned foreign firms. Superscripts ***, ** and * represent statistical significance at the 1, 5
and 10 percent levels.
41
Chinese Exports (NBS)
h=product, c=country, t=year
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
All Firms
All Exports
General Exports
ln(V hct)
ln(V hct)
0.470 ***
0.654 ***
0.168
0.172
1,254,502
1,208,169
0.47
0.44
h,c,t
h,c,t
SOEs
ln(V hct)
0.300 *
0.175
1,062,941
0.43
h,c,t
All Exports
Domestic
ln(V hct)
1.637 ***
0.511
558,821
0.41
h,c,t
P&A Exports
ln(V hct)
0.370 *
0.222
381,410
0.46
h,c,t
All three types of exports
experience relative growth
following PNTR
Foreign
ln(V hct)
0.908 ***
0.253
569,022
0.42
h,c,t
Notes: Table reports results of product-country-year level generalized triple difference-in-differences
OLS regressions of log Chinese export value on noted triple difference-in-differece term as well as
product (h), country (c) and year (t) fixed effects. Results for fixed effects as well as all other terms
required to identify the triple difference-in-differences term of interest are suppressed. Data span
2000 to 2005. Robust standard errors adjusted for clustering at the product level are displayed below
each coefficient. All exports are defined as the sum of general and processing & assembly (P&A)
exports. All firms are the union of state-owned enterprises, privately owned domestic firms and
privately owned foreign firms. Superscripts ***, ** and * represent statistical significance at the 1, 5
and 10 percent levels.
42
Chinese Exports (NBS)
h=product, c=country, t=year
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
1{c=US} x Post x NTR Gaph
Observations
R2
Fixed Effects
All Firms
All Exports
General Exports
ln(V hct)
ln(V hct)
0.470 ***
0.654 ***
0.168
0.172
1,254,502
1,208,169
0.47
0.44
h,c,t
h,c,t
SOEs
ln(V hct)
0.300 *
0.175
1,062,941
0.43
h,c,t
All Exports
Domestic
ln(V hct)
1.637 ***
0.511
558,821
0.41
h,c,t
P&A Exports
ln(V hct)
0.370 *
0.222
381,410
0.46
h,c,t
Foreign
ln(V hct)
0.908 ***
0.253
569,022
0.42
h,c,t
All three types of exports
experience relative growth
following PNTR
Relative growth occurs
among all three firm
types, including “foreign”
which may indicate withinfirm offshoring by US
firms
Notes: Table reports results of product-country-year level generalized triple difference-in-differences
OLS regressions of log Chinese export value on noted triple difference-in-differece term as well as
product (h), country (c) and year (t) fixed effects. Results for fixed effects as well as all other terms
required to identify the triple difference-in-differences term of interest are suppressed. Data span
2000 to 2005. Robust standard errors adjusted for clustering at the product level are displayed below
each coefficient. All exports are defined as the sum of general and processing & assembly (P&A)
exports. All firms are the union of state-owned enterprises, privately owned domestic firms and
privately owned foreign firms. Superscripts ***, ** and * represent statistical significance at the 1, 5
and 10 percent levels.
43
Changes in U.S. Factor Intensity
• Use CM to examine changes in firm employment by production versus
non-production worker, and also changes in capital stock
• CM available only every 5 years, so regression sample now includes
only 1992, 1997, 2001, 2007
• Same DID specification as before
44
Changes in U.S. Factor Intensity
• Industry level
– PNTR is associated with increased capital and skill intensity
– Decline in production workers steeper than non-production
– Little change in capital
• Plant level
– PNTR is associated with increased capital intensity
• Rise in plant and industry capital intensity is consistent with
– Changes in product composition (Khandelwal 2010)
– Adoption of labor-saving technologies (Bloom et al 2015)
• So, PNTR may be associated with employment reductions
beyond those attributable to replacement of U.S. production by
Chinese imports
45
Changes in U.S. Factor Intensity (CM)
Industry Level
ln(NP/Empit)
Post x NTR Gapi
Post x ln(K/Empi,1990 )
0.159
0.062
-0.049
0.018
ln(K/Empit)
***
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi}
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
***
***
Post x ln(NP/Empi,1990)
Post x Contract Intensityi
0.556
0.157
ln(NProdit)
0.134 ***
0.045
0.127 *
0.066
0.061
0.054
-0.051
0.071
-0.044 **
0.019
0.072
0.060
-0.108
0.494
0.298 **
0.148
1,280
0.97
i,t
Yes
0.051
-0.021
0.054
0.172
0.130
-0.213
0.159
0.298 ***
0.085
0.065
0.138
-0.015
0.055
0.048
0.117
0.182
0.959
0.241
0.263
1,280
0.97
i,t
Yes
0.178
-0.324 *
0.186
-0.031
0.031
0.075
0.077
-0.017
0.159
-0.142
0.206
0.140
0.106
-0.314
0.232
-0.010
0.068
-0.274 ***
0.080
-1.246
1.114
0.170
0.376
1,280
0.98
i,t
Yes
-0.104
ln(Prodit)
-0.531 ***
0.222
0.019
0.042
0.217 ***
0.079
-0.299 *
0.178
-0.467 **
0.217
0.015
0.133
-0.222
0.250
-0.040
0.075
-0.352 ***
0.132
-0.696
1.406
-0.292
0.347
1,280
0.98
i,t
Yes
-0.170
ln(Empit)
-0.481 **
0.218
0.006
0.039
0.181 **
0.079
-0.201
0.169
-0.332
0.213
0.070
0.121
-0.265
0.235
-0.018
0.070
-0.335 ***
0.117
-1.094
1.280
-0.158
0.359
1,280
0.98
i,t
Yes
-0.154
ln(Kit)
-0.097
0.230
-0.082 **
0.041
0.200 ***
0.083
-0.193
0.158
-0.507 ***
0.212
0.401 ***
0.129
-0.095
0.229
-0.021
0.070
-0.306 ***
0.103
-0.709
1.147
-0.113
0.354
1,280
0.98
i,t
Yes
-0.031
46
Changes in U.S. Factor Intensity (CM)
Plant Level
Post x NTR Gapp
Post x ln(K/Empp,1990 )
ln(NP/Empit)
ln(K/Empit)
0.003
0.082
-0.039
0.006
0.295
0.139
Agep
0.022
0.013
0.021
0.092
TFPp
0.017
-0.042
0.026
-0.073
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi }
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
***
-0.240
0.123
-0.027
0.013
-0.290
0.024
0.197
***
0.031
-0.007
***
Post x ln(NP/Empp,1990 )
Post x Contract Intensityi
ln(NProdit)
**
***
0.012
0.034
0.058
0.236 ***
0.079
0.014
0.052
0.180 ***
0.072
-0.048 ***
0.020
0.085
0.058
-0.849
0.582
0.268 *
0.145
257,503
0.78
p,t
Yes
0.001
0.021
0.114
0.097
-0.166
0.168
0.239 **
0.103
0.155
0.170
-0.015
0.054
0.081
0.066
-0.949
0.681
-0.009
0.240
257,503
0.73
p,t
Yes
0.094
ln(Prodit)
*
**
***
***
0.012
0.064
0.117
0.222
0.165
0.150
0.097
-0.210
0.201
0.051
0.043
-0.139
0.089
0.015
0.844
0.591 ***
0.237
257,503
0.93
p,t
Yes
-0.077
-0.280
0.142
-0.008
0.014
0.109
0.020
0.213
ln(Empit)
**
***
***
-0.276
0.112
-0.009
0.012
0.016
0.018
0.195
ln(Kit)
***
-0.419
0.268
-0.254
0.023
0.070
0.028
0.244
*
0.027
-0.037
***
0.030
0.032
0.025
0.031
0.022
-0.214 *
0.128
-0.388 **
0.190
0.141
0.123
-0.550 **
0.252
-0.130 **
0.063
-0.191 *
0.100
1.827
1.220
0.179
0.252
257,503
0.93
p,t
Yes
-0.089
0.017
-0.094
0.102
-0.229
0.144
0.103
0.086
-0.387 **
0.188
-0.057
0.048
-0.185 *
0.095
0.868
0.903
0.304
0.223
257,503
0.95
p,t
Yes
-0.088
***
***
***
0.025
-0.369 **
0.168
-0.294
0.288
0.453 ***
0.174
0.064
0.267
-0.013
0.079
-0.184
0.116
0.904
1.080
-0.262
0.263
257,503
0.91
p,t
Yes
-0.134
47
Additional Plant-Level Results (LBD)
• Compare plant employment and plant death regressions
– Reaction to PNTR included both shrinking and dying
• Input-output linkages
– Use input-output tables to compute plants’ exposure to PNTR the
inputs they purchase (upstream NTR gap) and the industries they
sell to (downstream NTR gap)
– Employment among continuing plants and plant survival respond
negatively to exposure to PNTR in downstream
– Indirect evidence of trade-induced supply-chain disruptions
(Baldwin and Venables 2013)
48
Additional Plant-Level Results (LBD)
ln(Empit)
Post x NTR Gapp
-0.380
0.089
Post x NTR Gapp
Upstream
Post x NTR Gapp
Downstream
Post x ln(K/Empp,1990 )
Post x ln(NP/Empp,1990 )
Post x Contract Intensityi
Post x DChina Import Tariffs i
Post x DChina Subsidies i
Post x DChina Licensing i
Post x 1{Advanced Technologyi }
MFA Exposureit
NTRit
U.S. Union Membershipit
Observations
R2
Fixed Effects
Employment Weighted
Implied Impact of PNTR
ln(Empit)
***
-0.082 ***
0.016
0.052 *
0.031
-0.189 ***
0.081
-0.396 ***
0.104
0.022
0.073
-0.121
0.146
-0.056 **
0.028
-0.193 ***
0.064
0.555
0.513
0.112
0.132
1,181,142
0.95
p,t
Yes
-0.117
-0.208 **
0.090
-0.280
0.427
-0.691 ***
0.159
-0.070 ***
0.015
0.034
0.030
-0.218 ***
0.081
-0.278 ***
0.109
0.022
0.069
-0.036
0.135
-0.055 **
0.027
-0.167 ***
0.053
0.524
0.513
0.164
0.133
1,181,142
0.95
p,t
Yes
-0.143
1{Deathpt+1}
0.064
0.020
1{Deathpt+1}
***
-0.006 **
0.003
-0.016 ***
0.006
0.003
0.013
-0.006
0.020
0.023 *
0.012
0.007
0.022
0.007
0.005
0.037 ***
0.014
0.031
0.052
0.012
0.014
2,079,616
0.79
p,t
Yes
.
0.042 **
0.019
-0.022
0.082
0.103 ***
0.041
-0.009 ***
0.003
-0.013 ***
0.005
0.010
0.014
-0.027
0.018
0.023 **
0.011
-0.002
0.023
0.005
0.004
0.035 ***
0.013
0.039
0.048
0.003
0.012
2,079,616
0.79
p,t
Yes
.
49
Conclusions
• Strong link between US manufacturing job loss and PNTR
– Not evident in EU which did not undergo similar policy change
• Potential mechanisms include
– Greater incentives for U.S. firms to import inputs and final goods
– Greater incentives for Chinese firms to scale up exports
– Greater incentives for U.S. firms to introduce labor-saving
technologies
• Next steps
– Did PNTR induce reallocation within firms?
– How did PNTR affect procurement patterns?
50
Thanks!
51