Seminar Vol. 99

Topic: Polarization of American Workers: The Big Squeeze from Occupational Exposure to Value-added Imports

Speaker: Leilei Shen, Kansas State University

Time: May 31st, 2018 13:30–14:45

Venue: Conference Room 106B, Zhonghui Building

Abstract:

We link U.S. industry-level value-added trade data with U.S. worker-level data from the Current Population Surveys from 1995 to 2009. We find that U.S. occupational exposure to value-added imports has a negative effect on the wages earned by intermediate-routine workers, which leads to wage polarization among American workers. In particular, the polarization of wages is primarily driven by occupational exposure to value-added imports of final goods from middle-income countries, while exposure to final goods imported from high-income countries has a negative, albeit more fairly distributed, effect across U.S. workers' wages. On the other hand, occupational exposure to value-added imports of intermediate goods from middle-income countries is associated with a positive wage effect for least-routine workers, signaling to the presence of strong complementarities between the group of least-routine workers and imports of intermediate goods from this group of countries.