Trade and Welfare (Across Local Labor Markets) / Ryan Kim, Jonathan Vogel.

Format:

Book

Author/Creator:

Kim, Ryan.

Contributor:

National Bureau of Economic Research.

Vogel, Jonathan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27133.

NBER working paper series no. w27133

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Trade and Welfare

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

What are the welfare implications of trade shocks? We provide a sufficient statistic that measures changes in welfare, to a first-order approximation, taking into account adjustment in labor supply, in frictional unemployment, and in the sectors to which workers apply while allowing for arbitrary heterogeneity in worker productivity and nonpecuniary returns across sectors. We apply these insights to measure changes in welfare across commuting zones (CZs) in the U.S. between 2000-2007. We find that granting China permanent normal trade relations lowers the welfare of a CZ at the 90th percentile of exposure by 3.1 percentage points relative to a CZ at the 10th percentile; of this, approximately 65 percent is due to changes in unemployment and much of this is driven by the non-pecuniary costs of unemployment.

Notes:

Print version record

May 2020.