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State and Regional Variation in the Effects of Trade on Job Displacement in the US Manufacturing Sector, 1982–1999

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Abstract

Worker-level data from the 1984–2000 Displaced Worker Surveys are employed to examine the effects of trade on manufacturing workers’ probabilities of job displacement. Observed changes in import and export penetration rates yield increases in displacement probabilities for the North Central, Middle Atlantic and South Central regions yet lower displacement probabilities for the Plains/West and Pacific regions. Changes in import and export price indexes lead to increases in displacement probabilities for the Pacific, Southeast and Northeast regions and decreases for the South Central and Middle Atlantic regions. However, while the influences of imports and exports on job displacement vary considerably across states and regions, the estimated net effect of trade on displacement probabilities is minor, generally speaking, when compared to the combined influence of other factors.

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Notes

  1. Kletzer (2002); Blanchflower (2000); Belman and Lee (1996) and Dickens (1988) review the literature.

  2. Due to a lack of domestic price indexes, we assume domestic price effects pass through to export prices. Thus, coefficients on export price variables capture the effects of chages in export and domestic prices.

  3. Jacobson et al. (1993); Stevens (1997) and Kletzer and Fairlie (2003) examine displacement-related wage and earnings losses.

  4. Annual, 3- and 4-year changes in trade-related variables were also employed. The results indicate a stronger link exists between trade and displacement over 2- and 3-year horizons. Given the similarity in results across estimations employing 2- and 3-year changes, we report only the results obtained when 2-year changes in trade-related variables are utilized.

  5. Industry affiliation was coded, for the 1984–2000 period, using the CIC system. Beginning in 2002, DWS observations are classified using the North American Industrial Classification System. The lack of a reliable CIC-to-NAICS concordance prohibits undertaking analysis for more recent surveys.

  6. An industry listing is provided in the Appendix.

  7. The concordance created for this study, which permits mapping of data from the four-digit SITC (rev. 3) industry level to the four-digit 1987 SIC industry level, is available upon request.

  8. Examination of the trade–displacement relationship using industry data for states and/or regions would be preferable; however, data limitations hinder analysis at such a level of detail.

  9. Estimated probabilities are derived as \(\widehat{P}_{i} = \frac{{e^{{\widehat{L}_{i} }} }}{{1 + e^{{\widehat{L}_{i} }} }}\), where \(\widehat{L}_{i} = \widehat{\alpha }_{0} + \widehat{\beta }_{x} X_{i} \). Values for the vector X i are values that correspond to individuals.

  10. We acknowledge the limitations of our assumption that imports, exports and other factors that potentially influence the likelihood of displacement are independent and proceed cautiously with this in mind.

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Acknowledgements

Funding for this project was provided through a grant from the W.E. Upjohn Institute for Employment Research and through the Franklin & Marshall College Hackman Scholars Program. Nathan Magnan provided excellent research assistance.

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  1. Franklin & Marshall College, Lancaster, PA, USA

    Roger White

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  1. Roger White
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Correspondence to Roger White.

Appendix

Appendix

Appendix: Industry Listing (CIC codes and industry name. Asterisks denote industries for which price index data were available).

100* Meat products; 101 Dairy products; 102* Canned, frozen and preserved fruits and vegetables; 110* Grain mill products; 111 Bakery products; 112 Sugar and confectionary products; 120* Beverage industries; 121 Miscellaneous food preparations and kindred products; 130* Tobacco manufactures; 132* Knitting mills; 140 Dyeing and finishing textiles, except wool and knit goods; 141 Carpets and rugs; 142 Yarn, thread and fabric mills; 150* Miscellaneous textile mill products; 151* Apparel and accessories, except knit goods; 152* Miscellaneous fabricated textile products; 160* Pulp, paper, and paperboard mills; 161 Miscellaneous paper and pulp products; 162* Paperboard containers and boxes; 171 Newspaper publishing and printing; 172* Printing, publishing, and allied equipment industries, except newspapers; 180* Plastics, synthetics, and resins; 181* Drugs; 182* Soaps and cosmetics; 190 Paints, varnishes, and related products; 191* Agricultural chemicals; 192* Industrial and miscellaneous chemicals; 200* Petroleum refining; 201* Miscellaneous petroleum and coal products; 210 Tires and inner tubes; 211 Other rubber products, and plastic footwear and belting; 212* Miscellaneous plastics products; 220 Leather tanning and finishing; 221 Footwear, except rubber and plastic; 222 Leather products, except footwear; 230 Logging; 231 Sawmills, planning mills, and millwork; 232 Wood buildings and mobile homes; 241 Miscellaneous wood products; 242* Furniture and fixtures; 250 Glass and glass products; 251 Cement, concrete, gypsum, and plaster products; 252 Structural clay products; 261 Pottery and related products; 262 Miscellaneous nonmetallic mineral and stone products; 270* Blast furnaces, steelworks, rolling and finishing mills; 271* Iron and steel foundries; 272* Primary aluminum industries; 280* Other primary metal industries; 281* Cutlery, hand tools, and other hardware; 282 Fabricated structural metal products; 290* Screw machine products; 291 Metal forgings and stampings; 292 Ordnance; 300* Miscellaneous fabricated metal products; 310* Engines and turbines; 311* Farm machinery and equipment; 312* Construction and material handling machines; 320* Metalworking machinery; 321* Office and accounting machines; 322* Computers and related equipment; 331* Machinery, except electrical, not elsewhere classified; 340* Household appliances; 341* Radio, television, and communication equipment; 342* Electrical machinery, equipment and supplies, not elsewhere classified; 351* Motor vehicles and motor vehicle equipment; 352 Aircraft and parts; 360 Ship and boat building and repairing; 361 Railroad locomotives and equipment; 362 Guided missiles, space vehicles, and parts; 370* Cycles and miscellaneous transportation equipment; 371* Scientific and controlling instruments; 372* Medical, dental, and optical instruments and supplies; 380* Photographic equipment and supplies; 381* Watches, clocks, and clockwork operated devices; 390* Toys, amusement, and sporting goods; 391 Miscellaneous manufacturing industries.

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White, R. State and Regional Variation in the Effects of Trade on Job Displacement in the US Manufacturing Sector, 1982–1999. J Labor Res 29, 347–364 (2008). https://doi.org/10.1007/s12122-007-9032-z

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