The structure of the global economy currently is being transformed in ways that will have profound implications for the location of production, the nature of work, and economic well-being around the world. Early stages of globalization were characterized by the international exchange of final products, whether port for wheat or automobiles for apparel, resulting in a spatial division of labor that was sorted by industry. In contrast, the current round of globalization is separating production tasks once integrated within firms and industries, shifting them to locations around the world. To understand the implications of this shift for the U.S. economy, greater understanding is needed about tasks that can be "offshored" and which are likely to remain place-bound. The objective of this research project is to measure how trade has impacted the task structure of the U.S. economy. While theoretical models of task trade have recently been developed, empirical exploration has been severely limited by lack of appropriate data. The investigators will create a unique dataset suited to measuring the impact of task trade by linking detailed U.S. Census microdata that describe trade flows, firms, workers and the tasks in which they are engaged. These data will enable the researchers to explore three primary questions: (1) What is the impact of trade on the task structure of the U.S. economy? (2) How is trade-induced job loss related to the analytic and interpersonal complexity of occupations? (3) How has the subnational geography of tasks shifted in the U.S. economy over the last fifteen years, and how are these shifts related to the regional impacts of trade and the characteristics of local production systems?
In today's highly interconnected world, patterns of trade are closely linked to economic performance and the geography of work. This project will improve scientific knowledge regarding the transformation of the global system of trade from one premised on exchanges of final goods to one focused on the exchange of a rapidly increasing array of intermediate goods and services. The project will measure the impact of the changing nature of trade on the structure of work in the U.S. economy and the differential effect of that change across U.S. regions. The results of this project will help to identify the nature of jobs that are robust to trade competition and those footloose activities that are likely to be increasingly located offshore. The project also will contribute to ongoing debates in fields like education and labor economics regarding the preparation required for 21st century workers in advanced economies.
Normal 0 false false false EN-GB JA X-NONE NSF Project Outcomes Report for the General Public: Globalization, Trade, and the Task Content of U.S. Employment PIs: David Rigby and Tom Kemeny At its peak in the 1960s, manufacturing accounted for a little less than a third of all jobs in the United States. By January 2013, less than 9 percent of all U.S. workers were employed in the manufacturing sector. The mid-20th century preponderance of well-paid manufacturing jobs underpinned a society defined by its large middle class. The disappearance of these jobs has accompanied large and persistent increases in wage inequality, particularly in terms of the gap between those in the middle of the wage distribution and those at the top. Attempts to explain the loss of manufacturing jobs and rising inequality have focused on the widespread adoption of computers in the workplace and rising international competition in the form of imports. Consensus from early empirical studies was that the role of international competition was minor. This consensus has started to be challenged by new research motivated by the recent growth of low-wage exporters, in particular China. The purpose of this project was to leverage confidential U.S. Census Bureau microdata in order to deepen our understanding of the relative impacts of low-wage import competition and technological change on the labor market for manufacturing workers in the United States. Combining data from the Longitudinal Employer-Household Dynamics (LEHD) program, the Census of Manufactures and Household Census, as well as product-level U.S. import and export accounts, the project examined how import competition from low-wage countries alters the profiles of manufacturing plants, causes job loss among certain kinds of workers; drives some establishments to close; shifts the kinds of tasks that industries perform; generates higher levels of wage inequality. Results from the research provide new and compelling evidence that import competition from low-wage economies has played a significant role in restructuring labor demand within manufacturing, contributing to the sharp rise in wage inequality in the U.S. economy. This result is robust to changes in manufacturing technology and after controlling for a range of manufacturing plant and worker characteristics. The project documents several channels that link low-wage import competition to substantial unequal labor market outcomes. First, at the level of individual industries, the findings indicate that rising import competition from developing countries has influenced a shift toward greater demand for workers performing nonroutine as opposed to routine tasks. Just as theory in economic geography predicts, those tasks that are interpersonally and analytically complex are resistant to offshoring, while local industries replace routine work that can be easily blueprinted with imports from low-wage economies. Moreover, greater education and nonroutine tasks are imperfectly correlated, suggesting that increasing educational attainment is no panacea for import competition. This means that American workers require education and skills that is applied to work that intensively demands analytical and interpersonal nonroutineness -- a perpetually moving target. Second, the project also confirms that import competition plays an important role in explaining the rise in the relative rewards enjoyed by `white-collar' workers, even after controlling for computer investment and other firm- and industry-specific factors. Yet, the results also present a geographically differentiated picture of vulnerability to import competition from developing economies. The impact of trade on wage inequality is not uniform across U.S. states and Census Regions. Lacking state-level measures of imports and exports, no prior research has demonstrated this kind of spatial variation. Third, the research confirms a robust relationship between import competition and plant closure. Prior work has uncovered this relationship, but this study offers a number of pieces of value added. It is the first known study to account for unobserved heterogeneity among plants in models of exit, and it reveals that plant closure is less likely among plants that are part of multi-unit and multinational firms in general, though multi-national firms with plants in low-wage countries are more likely to exit as a result of low-wage import competition. Fourth, the project establishes a sharply differentiated relationship between trade and job loss, depending on educational attainment. Rising low-wage import competition leads to job loss among high-school educated workers, with subsequent jobs paying less than their prior wage. No such relationship is detected in workers who hold at least a four-year college degree. Finally, the study has documented how plants adjust their workforce in response to direct imports from low-wage economies – a sign of offshoring activity. Across much of the study period, when plants decide to offshore production to low-wage economies, white-collar and higher-wage workers are generally rewarded with higher shares of plant employment and wages. These results have led to one published paper and one currently under revision, with four additional papers nearly readied for submission to journals in both geography and economics.
