The Effects of the U.S. Trade Engagements on the Demographic and Spatial Distribution of Employment and Earnings

University Of Colorado At Boulder, Boulder CO

Investigators

Abstract

Abstract This project will provide insight into the labor market implications of alternative trade policies by highlighting the roles of multiple trade engagement channels, worker mobility responses, and price adjustments. In particular, this project will generate a more comprehensive account of the earnings and employment responses to recent changes in the international trade environment among worker and firm types defined by combinations of characteristics such as region, industry, worker prior earnings, firm size and average pay. The project will also provide a set of novel stylized facts about employment composition and earnings distributions among firms featuring different types of trade engagement. This project will assemble a database that links the near universe of U.S. matched employer-employee records featuring worker demographics and pay with both firm-level customs records on all firms' export and import behavior. The project will also develop a two-sided assignment model that accommodates a rich pattern of sorting of workers to firms and market clearing in many interrelated labor markets defined by a large set of imperfectly substitutable worker types. This model will incorporate changes in the level and composition of labor demand among import competitors but also exporters, downstream firms able to buy cheaper inputs, multinationals able to reconfigure their supply chains, and employees from non-trading firms that are affected indirectly through overlapping labor markets. Finally, using the estimated model, this project will produce simulations of counterfactual scenarios that isolate the equilibrium impact of alternative trade policies on employment and the earnings distribution among many worker and firm types. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.