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Cited by 111Global trade and economicsLabor market dynamics and wage inequalityEconomic Theory and Policy

Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade

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Galle, Simon, Rodríguez-Clare, Andrés, Yi, Moises·2017·National Bureau of Economic Research
DOI 10.3386/w23737
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Abstract

We develop a multi-sector gravity model with heterogeneous workers to quantify the aggregate and group-level welfare effects of trade.We estimate the model using the structural relationship between China-shock driven changes in manufacturing employment and average earnings across US groups defined by commuting zone and education.We find that the China shock increases average welfare but some groups experience losses as high as five times the average gain.Adjusted for plausible measures of inequality aversion, gains in social welfare are positive and only slightly lower than with the standard aggregation.

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  • Industries more exposed to trade with China have seen lower incomes for affected workers.

    “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 Galle, Rodríguez-Clare, and Yi 2017

    Section 4.2 reports that groups more exposed to the China shock experienced a relative decline in average earnings. The analysis measures income for groups of workers across all employment, not specifically workers in more-exposed industries; its manufacturing-worker income estimate was negative but not statistically significant. (LLM, conf=0.84)

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Research works printed but not linked: 40

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Cited by

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Authors
Galle, S., Rodríguez-Clare, A., & Yi, M.
Affiliations
National Bureau of Economic Research (US)
ORCID
Galle, Simon
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2017-08
DOI
10.3386/w23737
OpenAlex
W2358076756
Cited by
111
References
2
Citations by year
2026: 1 · 2025: 7 · 2024: 8 · 2023: 13 · 2022: 14 · 2021: 14 · 2020: 17 · 2019: 14 · 2018: 10 · 2017: 3 · 2016: 5 · 2015: 3 · 2014: 2
Type
report
Language
en
Open access
Locations
National Bureau of Economic Research (publishedVersion)
Funders
National Science Foundation (1561854)
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 › General Economics, Econometrics and Finance › Economic Theory and Policy
Keywords
trade effects, distributional effects, aggregate welfare, worker heterogeneity, China shock, manufacturing employment, earnings, commuting zones, inequality aversion, social welfare (welfare economics), US-China trade

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