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International trade and local labor markets: Do foreign and domestic shocks affect regions differently?

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  • Mark D. Partridge
  • Dan S. Rickman
  • M. Rose Olfert
  • Ying Tan
Abstract
Despite the attention given to international trade in discussion of the economic struggles of many US regions, it is unclear whether international trade shocks impact local economies more, or differently, than shocks originating within the domestic economy. A challenge in making this discernment is separating trade shocks from common or domestic shocks. Therefore, using US county-level data for 1990–2010, this study carefully constructs shocks to local economies, isolating those arising from international imports and exports to assess whether trade shocks have different effects from domestic shocks. In confirmatory analysis, we also employ a novel combination of IV and matching strategies. We examine a variety of indicators including employment growth, population growth, employment rates, wage rates and poverty rates. The results suggest that international trade shocks have some different effects than overall domestic shocks, though likely less than commonly perceived. We also find that domestic shocks dominate international trade shocks in explaining variation in regional labor market outcomes.

Suggested Citation

  • Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2017. "International trade and local labor markets: Do foreign and domestic shocks affect regions differently?," Journal of Economic Geography, Oxford University Press, vol. 17(2), pages 375-409.
    • Handle: RePEc:oup:jecgeo:v:17:y:2017:i:2:p:375-409.
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    2. Timothy J. Bartik & Nathan Sotherland, 2019. "Local Job Multipliers in the United States: Variation with Local Characteristics and with High-Tech Shocks," Upjohn Working Papers 19-301, W.E. Upjohn Institute for Employment Research.
    3. Rajbhandari, Isha & Faggian, Alessandra & Partridge, Mark D., 2022. "Oil and gas boomtowns and occupations: What types of jobs are created?," Energy Economics, Elsevier, vol. 115(C).
    4. Bell, Kathleen P. & Crandall, Mindy & Munroe, Darla K. & Colocousis, Chris & Morzillo, Anita, 2018. "Rural forest-based communities, economic shocks, and economic trajectories," 2018 Annual Meeting, August 5-7, Washington, D.C. 274499, Agricultural and Applied Economics Association.
    5. Mark Partridge & Alexandra Tsvetkova & Michael Betz, 2021. "Are the most productive regions necessarily the most successful? Local effects of productivity growth on employment and earnings," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 30-61, January.
    6. Yelena Andreyeva & Artyom Ratner & Oksana Voronkova & Anatoly Tarasov, 2018. "The Influence of Import Substitution on Regional Positioning in the System of International Economic Relations," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1438-1449.
    7. Bo Feng, 2023. "Charter school proliferation and school district fiscal stress, a chicken‐egg problem," Growth and Change, Wiley Blackwell, vol. 54(4), pages 853-869, December.
    8. Cai, Zhengyu & Maguire, Karen & Winters, John V., 2018. "Who Benefits from Local Oil and Gas Employment? Labor Market Composition in the Oil and Gas Industry in Texas," GLO Discussion Paper Series 246, Global Labor Organization (GLO).
    9. Tsvetkova, Alexandra, 2016. "Do diversity, creativity and localized competition promote endogenous firm formation? Evidence from a high-tech US industry," MPRA Paper 72349, University Library of Munich, Germany.
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    11. Clément Malgouyres, 2017. "The Impact Of Chinese Import Competition On The Local Structure Of Employment And Wages: Evidence From France," Journal of Regional Science, Wiley Blackwell, vol. 57(3), pages 411-441, June.
    12. Nikolaos Terzidis & Raquel Ortega‐Argilés, 2021. "Employment polarization in regional labor markets: Evidence from the Netherlands," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 971-1001, November.
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    More about this item

    Keywords

    International trade impacts; US counties; regional growth;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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