Working Paper: NBER ID: w24490
Authors: Teresa C. Fort; Justin R. Pierce; Peter K. Schott
Abstract: We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, firms, establishments, and regions. We show that these data provide support for both trade- and technology-based explanations of the overall decline of employment over this period, while also highlighting the difficulties of estimating an overall contribution for each mechanism. Toward that end, we discuss how further analysis of these trends might yield sharper insights.
Keywords: Manufacturing Employment; Trade; Technology; US Economy
JEL Codes: F1; J2; J6; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| net firm death (D85) | decline in manufacturing employment (O14) |
| net plant exits within continuing firms (L26) | decline in manufacturing employment (O14) |
| employment reallocations from higher-wage regions (J62) | employment reallocations to lower-wage regions (J68) |
| manufacturing firms diversification into non-manufacturing activities (L69) | shift in nature of manufacturing firms (L23) |
| trade liberalization (F13) | decline in manufacturing employment (O14) |
| technological advancements (O33) | decline in manufacturing employment (O14) |
| trade liberalization (F13) | labor productivity increases (J24) |
| technological advancements (O33) | labor productivity increases (J24) |