We study the role of offshoring in understanding long-run environmental impacts of tradeliberalization and the cleanup of US manufacturing. Leveraging detailed establishment-leveldata and a change in US trade policy toward China in the early 2000s, we show that USestablishments decrease toxic emissions in response to a reduction in trade policy uncertainty.Emission abatement is more pronounced for establishments that are more likely to engage inoffshoring activities. We provide comprehensive evidence that supports the pollution offshoringhypothesis: US manufacturers, especially those that emit pollutants intensely, source from abroad and establish more subsidiaries in China following the event.
The Evolution of Black-White Differences in Occupational Mobility Across Post-Civil War America (with Steven Durlauf, Dohyeon Lee, and Xi Song) "Revised!" Conditionally Accepted at American Economic Journal: Applied Economics
NBER Working Paper WP32370 Becker-Friedman Institute Research Briefs
Harris School of Public Policy "News" (June 2024)
We examine long-run differences in intergenerational occupational mobility between Black and White Americans using linked censuses and survey data from 1850 to 2021. We document two main results. First, shifts in mobility dynamics, most notably for the 1940-1950 cohort, reshaped occupational structures and reduced racial segregation. Second, new measures of intergenerational persistence reveal both bottlenecks and the enduring memory in the mobility system, offering new perspectives on the role of mobility in explaining the lack of convergence in Black-White occupational outcomes.
The Extensive Margin of Restructuring: Adoption of New Work in a Global Economy "Revised!" Revise and Resubmit at Journal of International Economics
This paper examines trade-induced restructuring at the extensive margin, using a novel measure of new work---jobs employing new knowledge, skills, and technologies---based on the emergence of new job titles over time. I find that import competition significantly increases the adoption of new work in U.S. manufacturing industries. I also show that offshoring is central to this restructuring process and is accompanied by compositional shifts toward non-production activities. Finally, evidence from local labor market analysis indicates that these adjustments extend beyond within-industry responses and that new work is a critical channel through which trade shocks increase local wage inequality.
The Role of College Education in the Rise of “New Work”: Measurement and Evidence (with Cassandra Merritt and Giovanni Peri) "Revised!"
NBER Working Paper WP32526 VoxEU
Russell Sage Foundation Grant (Future of Work, June 2023)
Macro Roundup (June 6, 2024) The Magazine of the Institute for Employment Research
We develop a novel semantic-distance-based algorithm and apply it to job titles data to identify ``new work"---the set of new types of jobs introduced in a labor market. Implementing these measures for the US (1980 to 2010), we show that the share of college-educated workers across occupations and locations is the strongest predictor of ``new work" even after controlling for the role of technological change, trade, immigration, population aging, and local agglomeration economies. Leveraging the pre-1920 presence of land-grant colleges to predict the local supply of college-educated workers and implementing a matched treatment-control-type analysis, we find results consistent with a strong and positive causal effect of college-educated supply on ``new work" creation.
This paper examines how offshoring affects worker skill demands and studies its implications for wage inequality. Using Danish administrative data, we find that offshoring increases firm-level demand for higher skills in occupations with high exposure to foreign competition. This effect is more pronounced in low-productivity firms, highlighting distributional impacts across firms. By constructing a Becker-type worker-firm matching model in a global economy, we demonstrate underlying mechanisms and quantify the role of offshoring-induced adjustments. Offshoring increases firm similarity in worker skill and wages within high-exposed jobs, leading to a decrease in between-firm inequality---a contrast to the effects of technological change.
We study how environmental regulation shapes firms’ supply chains and emissions. Our analysis rests on three key observations: (i) the Clean Air Act imposes geographically and temporally varying stringency, (ii) U.S. firms deeply embedded in supply chains are also concentrated in regulated regions, and (iii) inter-firm linkages transmit both direct and indirect regulatory exposures through business partners. Using detailed U.S. establishment data combined with firm-to-firm linkage information, we distinguish between direct regulatory exposures faced by a firm's own establishments and indirect exposures originating from its suppliers and customers. We find that establishments facing regulatory shocks transmitted through their network counterparts sever ties with regulated partners and face barriers to forming new regulated relationships, with little evidence of substitution toward unregulated ones. While these network adjustments reveal how firms reorganize to mitigate regulatory shocks, they play only a modest role in explaining changes in environmental performance: establishments lower emissions in response to direct and supplier-side regulatory exposures but increase emissions when their customers are regulated---regardless of whether network adjustments are controlled for. The asymmetric responses are consistent with customers’ stronger bargaining power within core relationships, which enables them to shift compliance burdens upstream. Overall, the findings underscore the importance of accounting for indirect regulatory exposures when evaluating both supply chain adjustments and the environmental consequences of regulation.
After Offshoring: Which Skills Do Firms Seek Next? (with Peter Kuhn, Hani Mansour, and Jooyoun Park)
A Structural Model of Structural and Exchange Mobility (with Steven Durlauf, Dohyeon Lee, and Xi Song)