Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys

In this paper, we link industry-level data on offshoring activities of U.S. multinational firms, import penetration, and export shares with individual level worker data from the Current Population Surveys. We examine whether increasing globalization through offshoring or trade has led to reallocation of labor, both within and out of manufacturing, and measure its impact on the wages of domestic workers. We also control for the "routineness" of individual occupations. Our results suggest that (1) offshoring to high wage countries is positively correlated with U.S. manufacturing employment (2) offshoring to low wage countries is associated with U.S. employment declines (3) wages for workers who remain in manufacturing are generally positively affected by offshoring; in particular, we find that wages are positively associated with an increase in U.S. multinational employment in high income locations (4) much of the negative effects of globalization operate through downward pressure on wages of workers who leave manufacturing to take jobs in agriculture or services and (5) the downward pressure on aggregate U.S. wages operating through import competition has been quite important for some occupations. This effect has been overlooked because it operates across, not within, industries.

Estimating the impact of trade and offshoring on American workers using the current population surveys

The authors link industry-level data on trade and offshoring with individual-level worker data from the Current Population Surveys. They find that occupational exposure to globalization is associated with larger wage effects than industry exposure. This effect has been overlooked because it operates between rather than within sectors of the economy. The authors also find that globalization is associated with a reallocation of workers across sectors and occupations. They estimate wage losses of 2 to 4 percent among workers leaving manufacturing and 4 to 11 percent among workers who also switch occupations. These effects are most pronounced for workers who perform routine tasks.Labor Markets,Labor Policies,Economic Theory&Research,Emerging Markets,E-Business

China's marriage market and upcoming challenges for elderly men

Fertility decline has fueled a sharp increase in the proportion of'missing girls'in China, so an increasing share of males will fail to marry, and will face old age without the support normally provided by wives and children. This paper shows that historically, China has had nearly-universal marriage for women and a very competitive market for men. Lower-educated men experience higher rates of bachelorhood while women favor men with better prospects, migrating if needed from poorer to wealthier areas. The authors examine the anticipated effects of this combination of bride shortage and hypergamy, for different regions of China. Their projections indicate that unmarried males will likely be concentrated in poorer provinces with low fiscal ability to provide social protection to their citizens. Such geographic concentration of unmarried males could be socially disruptive, and the paper’s findings suggest a need to expand the coverage of social protection programs financed substantially by the central government.Population Policies,Population&Development,Demographics,Gender and Law,Gender and Health

The long-run economic consequences of high-stakes examinations : evidence from transitory variation in pollution

Cognitive performance during high-stakes exams can be affected by random disturbances that, even if transitory, may have permanent consequences. We evaluate this hypothesis among Israeli students who took a series of matriculation exams between 2000 and 2002. Exploiting variation across the same student taking multiple exams, we find that transitory PM2.5 exposure is associated with a significant decline in student performance. We then examine these students in 2010 and find that PM2.5 exposure during exams is negatively associated with postsecondary educational attainment and earnings. The results highlight how reliance on noisy signals of student quality can lead to allocative inefficiency

Evidence on the impact of Sustained Exposure to Air Pollution on Life Expectancy from China's Huai River Policy

This paper's findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSP) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. The quasi-experimental empirical approach is based on China's Huai River policy, which provided free winter heating via the provision of coal for boilers in cities North of the Huai River but denied heat to the South. Using a regression discontinuity design based on distance from the Huai River, we find that ambient concentrations of TSP are about 184 μg/m3 (95% CI: 61, 307) or 55% higher in the North. Further, the results indicate that life expectancies are about 5.5 (95% CI: 0.8, 10.2) years lower in the North due to an increased incidence of cardiorespiratory mortality. More generally, the analysis suggests that long-term exposure to an additional 100 μg/m3 of TSP is associated with a reduction in life expectancy at birth of about 3.0 years (95% CI: 0.4, 5.6).Robert Wood Johnson Foundatio

Why are American Workers getting Poorer? Estimating the Impact of Trade and Offshoring Using the CPS

Previous studies typically find small or insignificant effects of globalization on US workers. We argue that much of the impact on wages has been missed because globalization has led workers to move from higher paid manufacturing jobs to lower paid service jobs. To show this, we link industry-level data on trade and offshoring with individual-level worker data from the Current Population Surveys. Previous research focused on industry-level exposure to globalization, which we show has no significant impact on worker wages. Our new measure of occupational exposure to globalization shows significant effects of globalization on wages. Offshoring to low wage countries is associated with wage declines for US workers, and the workers most affected are those performing routine tasks. Import competition is associated with wage declines, while exports are associated with wage increases. We present evidence that globalization has led to the reallocation of workers away from higher wage manufacturing jobs into other sectors and other occupations. We estimate that occupation switching due to trade led to real wage losses of 12 to 17 percent.

Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys

We link industry-level data on trade and offshoring with individual-level worker data from the Current Population Surveys from 1984 to 2002. We find that occupational exposure to globalization is associated with significant wage effects, while industry exposure has no significant impact. We present evidence that globalization has put downward pressure on worker wages through the reallocation of workers away from higher-wage manufacturing jobs into other sectors and other occupations. Using a panel of workers, we find that occupation switching due to trade led to real wage losses of 12 to 17 percentage points

Chemical Fertilizer and Migration in China

This paper examines a possible connection between China’s massive rural to urban migration and high chemical fertilizer use rates during the late 1980s and 1990s. Using panel data on villages in rural China (1987-2002), we find that labor out-migration and fertilizer use per hectare are positively correlated. Using 2SLS, employing the opening of a Special Economic Zone in a nearby city as an instrument, we find that village fertilizer use is linked to contemporaneous short-term out-migration of farm workers. We also examine the long-term environmental consequences of chemical fertilizer use during this period. Using OLS, we find that fertilizer use intensity is correlated with future fertilizer use rates and diminished effectiveness of fertilizer, demonstrating persistency in use patterns, and suggesting that in areas with high use of fertilizer, the land is becoming less responsive. We also demonstrate that fertilizer use within a river basin is correlated with organic forms of water pollution, suggesting that industrialization has induced pollution in China both directly and through its impact on rural labor supply.