Aggregating Trade Shocks: From Local Labor Markets to National Outcomes

Koller, Julian and Stefanova, Stefani (2025): Aggregating Trade Shocks: From Local Labor Markets to National Outcomes.

Abstract

We leverage a novel spatial IV approach to develop a reduced-form estimator that maps local trade shocks into aggregate outcomes, accounting for inter-regional spillovers. For the China shock in the U.S., we find strong evidence for employment spillovers at the local level, which appear to propagate through input-output linkages rather than labor mobility. They shift the shock’s employment ramifications away from the Pacific and North Atlantic towards the South Atlantic region. For aggregate employment, our model rationalizes the 30% difference between Autor et al. (2013) and the structural follow-up literature but implies that it is insignificant from a statistical standpoint.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade Flows, Local Labor Markets, Import Competition
• Subjects: F - International Economics > F1 - Trade > F10 - General; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions

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