The ‘China Shock,’ Exports and U.S. Employment: A Global Input–Output Analysis

31 Pages Posted: 7 Oct 2018

See all articles by Robert C. Feenstra

Robert C. Feenstra

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Akira Sasahara

Keio University

Date Written: November 2018

Abstract

This paper quantifies the impact on U.S. employment from imports and exports during 1995–2011, using the World Input–Output Database. We find that the growth in U.S. exports led to increased demand for 2 million jobs in manufacturing, 0.5 million in resource industries, and a remarkable 4.1 million jobs in services, totaling 6.6 million. Two‐thirds of those service sectors jobs are due to the export of services themselves, whereas one‐third is due to the intermediate demand from manufacturing and resource—or merchandise—exports, so the total labor demand gain due to merchandise exports was 3.7 million jobs. In comparison, U.S. merchandise imports from China led to reduced demand of 1.4 million jobs in manufacturing and 0.6 million in services (with small losses in resource industries), with total job losses of 2.0 million. It follows that the expansion in U.S. merchandise exports relative to imports from China over 1995–2011 created net demand for about 1.7 million jobs. Comparing the growth of U.S. merchandise exports to merchandise imports from all countries, we find a fall in net labor demand due to trade, but comparing the growth of total U.S. exports to total imports from all countries, then there is a rise in net labor demand because of the growth in service exports.

Suggested Citation

Feenstra, Robert C. and Sasahara, Akira, The ‘China Shock,’ Exports and U.S. Employment: A Global Input–Output Analysis (November 2018). Review of International Economics, Vol. 26, Issue 5, pp. 1053-1083, 2018, Available at SSRN: https://ssrn.com/abstract=3261557 or http://dx.doi.org/10.1111/roie.12370

Robert C. Feenstra (Contact Author)

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Akira Sasahara

Keio University ( email )

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