How Did Exchange Rates Affect Employment in US Cities?

Haifang Huang () and Yao Tang

No 2013-7, Working Papers from University of Alberta, Department of Economics

Abstract: We estimate the effects of real exchange rate movements on employment in US cities between 2003 and 2010. We explore the differences in the composition of local industries to construct city-specific changes in exchange rates and estimate their effects on local employment in manufacturing industries and in nonmanufacturing industries. Controlling for year and city fixed effects, we find that a depreciation of the US dollar increased local employment in the manufacturing industries, our proxy for the tradable sector. The depreciation also increased employment in the nonmanufacturing industries, the nontradable sector. Furthermore, the effects on nonmanufacturing employment were stronger in cities that had a higher fraction of manufacturing employment, indicating the exchange rate movements’ indirect effects through the manufacturing industries. We also consider an alternative definition of the tradable sector that is broadened to include five service industries. The findings are similar.

Keywords: exchange rate; employment; US cities (search for similar items in EconPapers)
JEL-codes: F16 F31 J23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-05-01
New Economics Papers: this item is included in nep-opm and nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: HOW DID EXCHANGE RATES AFFECT EMPLOYMENT IN U.S. CITIES? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2013_007

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