International Trade and Job Displacement in U.S. Manufacturing, 1979-1991
Lori G. Kletzer
THE DOMESTIC labor market consequences of expansions of international trade is an area of long-standing national concern. The United States has become an increasingly open economy over the past three decades. Between 1965 and 1993, imports as a share of real gross domestic product (GDP) rose from 5 to 13.2 percent, while the share of exports rose from 4.8 to 11.6 percent.1 Over the latter half of this period ( 1979-93), employment in the manufacturing sector (the one most affected by trade) fell by 15 percent. Millions of workers have lost their jobs following plant closures, plant relocations, or large-scale reductions in operations. Many labor market participants and observers have linked the growth of international trade to the decline of manufacturing employment and the stagnation of real wages. As evidenced by
This research was supported by the Brookings Institution and the Social Sciences Division and the Academic Senate Committee on Research of the University of California, Santa Cruz. I am grateful to Jeannine Bailliu for her excellent research assistance, and to Henry S. Farber, Larry Mishel, Robert Bednarzik, Gregory Schoepfle, Susan Collins, Rob Fairlie, and Ken Kletzer for their comments and suggestions.