In “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” Autor, Dorn, and Hanson detail the effects of increased imports from China in commuting zones in the US. Import shocks increased unemployment in the manufacturing sector and lowered wages in other sectors. Wages in the manufacturing sector remained at approximately the same level, likely because those employed were skilled workers or had a higher demand for their services. In addition, transfer payments increased.
In “Skill Upgrading and exports,” Acceturro, Bugamelli, and Lamorgese complement the above paper by finding evidence of the causal impact exports have on Italian firms in regards to the skill level of the labor force in a given province. They use an instrumental variable approach that uses data on the export flow from a province and particular sector to country c and the imports of country c from the rest of the world, excluding Italy, during a particular time period.
Using data from UN Comrade Database and Autor’s datasets online, I can recreate the approach used in the “Skill Upgrading and Exports” article for the commuting zones in the US to build upon the research done by Autor, Dorn, and Hansen and research the skill content of US workers following increased trade with China and other developing countries.
Other articles discussing this topic include Yeaple (2005) who creates a simple model that shows additional opportunities for trade and exports will make the adoption of new technology more affordable and the demand for skilled workers will consequently rise. Amiti and Davis (2008) shows that there is a positive relationship between exports and wages for Indonesian firms and that the skill premium rises follow trade shocks.
A Simple Model of Firm Heterogeneity, international trade, and wages (Stephen Ross Yeaple) 2005
Skill Upgrading and Exports (Accetturo, Bugamelli, and Lamorgese) 2013
The China Syndrome: Local Labor Market Effects of Import Competition in the United States (Autor, Dorn, and Hanson) 2013
Trade, Firms, and Wages: Theory and Evidence (Amiti and Davis) 2011