The Surprisingly Swift Decline of US Manufacturing Employment
Abstract
This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imports from China, and higher entry by US importers and foreign-owned Chinese exporters. At the plant level, shifts toward less labor-intensive production and exposure to the policy via input-output linkages also contribute to the decline in employment. Results are robust to other potential explanations of employment loss, and there is no similar reaction in the European Union, where policy did not change. (JEL D72, E24, F13, F16, L24, L60, P33)
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Trade liberalization reduced trade-policy uncertainty due to binding commitments in GATT/WTO and regional trade agreements.
“it also reduced trade -policy uncertainty due to the binding commitments that countries made when entering the GATT/WTO or signing regional trade agreements.”
From De-Globalisation? Global Value Chains in the Post-COVID-19 Age (2020) · cites this paper as Pierce and Schott, 2016
Trade integration with China was a particularly salient contributor to the decline in U.S. manufacturing employment in the 1990s and 2000s.
“Autor, Dorn and Hanson (2013) and Pierce and Schott (2016) -further singled out trade integration with China as a particularly salient contributor to the decline in U.S. manufacturing employment in the 1990s and 2000s.”
From De-Globalisation? Global Value Chains in the Post-COVID-19 Age (2020) · cites this paper as Pierce and Schott (2016)
Industries more exposed to trade with China have seen larger contractions in employment.
“Industries more exposed to trade with China have seen higher exit of plants (Bernard, Jensen, and Schott 2006), larger contractions in employment (Pierce and Schott 2016; Acemoglu et al. 2016), and lower incomes for affected workers (Autor et al. 2014; Galle, Rodríguez-Clare, and Yi 2017; Caliendo, Dvorkin, and Parro 2019; Autor, Dorn, and Hanson 2019).”
From Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure (2020) · cites this paper as Pierce and Schott 2016
Cites
Import Competition and the Great US Employment Sag of the 2000s
Acemoglu, D., Autor, D., Dorn, D., Hanson, G. H., & Price, B. (2016) · Journal of Labor Economics · doi:10.1086/682384 · Cited by 1,113 · see citing works
The Long and Short of the Canada-U.S. Free Trade Agreement
Trefler, D. (2004) · American Economic Review · doi:10.1257/0002828042002633 · Cited by 1,071 · see citing works
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Why Are There Still So Many Jobs? The History and Future of Workplace Automation
Autor, D. H. (2015) · Journal of Economic Perspectives · doi:10.1257/jep.29.3.3 · Cited by 3,917 · see citing works
The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade
Autor, D. H., Dorn, D., & Hanson, G. H. (2016) · Annual Review of Economics · doi:10.1146/annurev-economics-080315-015041 · Cited by 1,305 · see citing works
Import Competition and the Great US Employment Sag of the 2000s
Acemoglu, D., Autor, D., Dorn, D., Hanson, G. H., & Price, B. (2016) · Journal of Labor Economics · doi:10.1086/682384 · Cited by 1,113 · see citing works
Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure
Autor, D., Dorn, D., Hanson, G., & Majlesi, K. (2020) · American Economic Review · doi:10.1257/aer.20170011 · Cited by 1,063 · see citing works
Difference-in-Differences Estimators of Intertemporal Treatment Effects
de Chaisemartin, C., & D’Haultfœuille, X. (2026) · Review of Economics and Statistics · doi:10.1162/rest_a_01414 · Cited by 740 · see citing works
Pre-Event Trends in the Panel Event-Study Design
Freyaldenhoven, S., Hansen, C., & Shapiro, J. M. (2019) · American Economic Review · doi:10.1257/aer.20180609 · Cited by 427 · see citing works
De-Globalisation? Global Value Chains in the Post-COVID-19 Age
Antràs, P. (2020) · doi:10.3386/w28115 · Cited by 376 · see citing works
“Why Is Labor Receiving a Smaller Share of Global Income? Theory and Empirical Evidence”
Dao, M., Das, M., Koczan, Z., & Lian, W. (2017) · IMF Working Papers · doi:10.5089/9781484311042.001 · Cited by 144 · see citing works
“Changing Business Dynamism and Productivity: Shocks vs. Responsiveness”
Decker, R., Haltiwanger, J., Jarmin, R., & Miranda, J. (2018) · doi:10.3386/w24236 · Cited by 83 · see citing works
When Work Disappears: Manufacturing Decline and the Falling Marriage-Market Value of Young Men
Autor, D., Dorn, D., & Hanson, G. (2017) · doi:10.3386/w23173 · Cited by 52 · see citing works
- Authors
- Pierce, J. R., & Schott, P. K.
- Affiliations
- Federal Reserve Board of Governors (US)
- Yale University (US)
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2016-07-01
- Volume
- 106
- Issue
- 7
- Pages
- 1632-1662
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W1539576063
- Cited by
- 1,363
- References
- 2
- Citations by year
- 2026: 154 · 2025: 132 · 2024: 164 · 2023: 134 · 2022: 140 · 2021: 164 · 2020: 118 · 2019: 95 · 2018: 97 · 2017: 66 · 2016: 42 · 2015: 27 · 2014: 19 · 2013: 9 · 2012: 1
- FWCI
- 253.26
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Historical Economic and Social Studies
- Keywords
- manufacturing employment decline, tariff increases, Chinese imports, import competition, labor-intensive manufacturing, input-output linkages
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