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Trade Development and Political Economy present: Justin R. Pierce

341 Eggers Hall

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Trade Development and Political Economy Present: Justin R. Pierce on "The Surprisingly Swift Decline of U.S. Manufacturing Employment"

Abstract: This paper finds a link between the sharp drop in U.S. manufacturing employment after 2001 and the elimination of trade policy uncertainty resulting from the U.S. granting of permanent normal trade relations to China in late 2000. We find that industries where the threat of tariff hikes declines the most experience greater employment loss due to suppressed job creation, exaggerated job destruction and a substitution away from low-skill workers. We show that these policy-related employment losses coincide with a relative acceleration of U.S. imports from China, the number of U.S. firms importing from China, the number of Chinese firms exporting to the U.S., and the number of U.S.-China importer-exporter pairs.

Short Bio:  Justin Pierce is an economist at the Federal Reserve Board of Governors.  His research focuses on the behavior of U.S. firms affected by international trade.

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