Kyle Chan over at his Substack High Capacity:
The ”China Shock” paper (actually a set of papers)1 sent shockwaves through the US political world when it was first released by a team of high-profile economists in January 2016. It estimated the US lost nearly 1 million manufacturing jobs from 1999 to 2011 due to a surge in Chinese imports starting around the time of China’s accession to the WTO in 2001.
The paper seemed to provide support for a growing narrative that trade—and specifically trade with China—was to blame for the decline of American manufacturing jobs. While this is not what the paper actually argued, its more nuanced findings were lost in much of the political debate. In November of that year, Donald Trump won the US presidential election for the first time and the rest is history.
Many American manufacturing jobs have indeed been lost to China. And many American families and communities have been devastated by the losses of these jobs. But the paper’s impact went far beyond its intended scope and illustrates the dangers of how research can be oversimplified and misused in public debates.
Even if you accept the paper’s estimate of nearly 1 million US manufacturing jobs lost to Chinese imports, this needs to be seen in the context of a much bigger structural shift in the US economy that has been taking place since the end of World War II. For decades, the US has been moving away from manufacturing jobs and toward service sector jobs. While rising Chinese imports did contribute to the loss of some US manufacturing jobs, it was far from the main cause.
More here.
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