Notes on:

Autor, D. H., Dorn, D., & Hanson, G. H. (2013): The China Syndrome: Local Labor Market Effects of Import Competition in the United States

1 What?

This paper relates changes in labor-market outcomes from 1990 to 2007 across us to changes in exposure to Chinese import competition.

It’s the first (?) in a series of groundbreaking works by David Autor, David Dorn and Gordon Hanson, where they examine the effect of cheap labour from China to the us’ labor market, and consequently, the effect of globalization (see Acemoglu and Autor 2011 for a review). It’s worth perusing the article to get the prerequisites need to understand the current directions of us-China discussion.

2 Why?

• In the 2000s, China’s current account surplus was averaged 5% of (whose?) gdp
• Some statistics provided:

3 How?

3.1 Theoretical prerequisites

• The Helpman-Krugman model of monopolistic competition: The authors developed a ge model that considers how increased import competition from China affects employment and wages in us commuting zones (treated as a small open economy).

3.2 Data

• Local labor markets are defined for each each commuting zones (czs), which enompass all metropolitan and nonmetropolittan areas in the us (See Tolbert and Sizer 1996 for the original deliniation).

4 And?

• An important break point is 2001 when China joined the wto

4.1 Model implications

• With balanced trade, productivity growth in China merely rellocates cz employment between traded sectors
• With imbalanced trade
• Benefit spreads, costs are concentrated

5 References