DP12173 Services Input Intensity and US Manufacturing Employment Responses to the China Shock

Author(s): Omar Bamieh, Matteo Fiorini, Bernard Hoekman, Adam Jakubik
Publication Date: July 2017
Keyword(s): China shock, import competition, Manufacturing employment, services input use, servicification
JEL(s): F16, L8
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12173

We present evidence that the negative effect of the China shock on US manufacturing employment is lower for industries that use services inputs more intensively. Different potential mechanisms for this finding are analyzed. This reveals significant heterogeneity across different types of services and their potential role in affecting labor demand and supply responses to greater import competition.