The China Syndrome: revisited The Effects of the Import Competition on United States Local Labor Markets in the extended timeline

Abstract

This thesis analyzes the effects of the Chinese import competition on the US local labor market from 1991 to 2018, and aims to capture the trend shifts in trade and employment rates post- 2009.While international trade's benefits are widely acknowledged, the debate persists regarding its effects on local employment and income inequality. The paper examines the relationship between increased Chinese imports and local manufacturing employment, analyzing data through descriptive, statistical, and instrumental variable methodologies. Descriptive analyses indicate a slowdown in import and employment growth post-2009. Statistical inference via OLS models reveals a persistent albeit slightly moderated negative correlation between import exposure and manufacturing employment. However, instrumental variable (IV) analysis challenges the reliability of earlier causal inferences, indicating a diminished suitability of the instrument for the updated time frame.