تجارت بین الملل و کشش تقاضای کار

In this paper I try to determine whether international trade has been increasing the own-price elasticity of demand for U.S. labor in recent decades. The empirical work yields three main results. First, from 1961 through 1991 demand for U.S. production labor became more elastic in manufacturing overall and in five of eight industries within manufacturing. Second, during this time U.S. nonproduction-labor demand did not become more elastic in manufacturing overall or in any of the eight industries within manufacturing. If anything, demand seems to be growing less elastic over time. Third, the hypothesis that trade contributed to increased elasticities has mixed support, at best. For production labor many trade-related variables have the predicted effect for specifications with only industry controls, but these predicted effects disappear when time controls are included as well. For nonproduction labor things are somewhat better, but time continues to be a very strong predictor of elasticity patterns. Thus the time series of labor–demand elasticities are explained largely by a residual, time itself. This result parallels the common finding in studies of rising wage inequality. Just as there seems to be a large unexplained residual for changing factor prices over time, there also seems to be a large unexplained residual for changing factor demand elasticities over time.

In recent years a number of economists have researched whether international trade has contributed to the ongoing rise in the U.S. relative price between more-skilled and less-skilled labor. There is still no clear consensus, however, about how much international trade has mattered. Many people find this ambiguity difficult to reconcile with the large amount of anecdotal evidence that trade has been placing substantial “pressure” on labor markets. In this paper I look for pressure not in the prices for labor but rather in the elasticities of demand for labor. I examine whether trade has been increasing firms’ equilibrium own-price elasticity of demand for labor. In theory trade can change labor–demand elasticities without changing labor prices. As will be discussed, trade can make labor demand more elastic in two main ways: by making output markets more competitive and by making domestic labor more substitutable with foreign factors. Trade can generate these effects without also generating product-price changes and, via the Stolper-Samuelson theorem, factor price changes.1 This means that finding little effect of trade on wages can be entirely consistent with finding a large effect of trade on elasticities. If this is the case then the proper interpretation of trade “pressuring” labor markets might hinge on elasticities.2 To determine trade’s effect on labor–demand elasticities the empirical work proceeds in two stages. First, using the NBER Productivity Data Base I estimate a time series from as far back as 1961 through 1991 of own-price demand elasticities for production labor and nonproduction labor for U.S. manufacturing overall and for manufacturing disaggregated into eight industries. The goal is to identify robust patterns over time in labor–demand elasticities. Second, I regress these estimated elasticities on several plausible measures of trade, technology, and institutional factors which can influence labor–demand elasticities. These stage-two regressions try to explain patterns in the stage-one elasticities with patterns in trade, technology, and labor-market institutions. The empirical work yields three main results. First, over time demand for production labor has become more elastic in manufacturing overall and in five of eight industries within manufacturing. The elasticity fluctuated around −0.5 until the mid-1970s, but then it dropped steadily to around −1.0 by 1991. Second, nonproduction-labor demand has not become more elastic in manufacturing overall or in any of the industries within manufacturing. Almost all estimates range somewhere between −0.5 and −0.8, and if anything, demand seems to be growing less elastic over time. Third, the hypothesis that trade contributed to increased elasticities has mixed support, at best. For production labor many trade variables have the predicted effect for specifications containing as regressors only these variables or them plus industry fixed effects. However, these predicted effects generally disappear when time controls are included as well. For nonproduction labor things are somewhat better. Four plausible trade-related variables (narrow and broad outsourcing, the foreign-affiliate share of U.S. multinational corporations’ assets, net exports as a share of shipments) have the predicted sign at at least the 90% level of significance even when both industry and time controls are included. For both labor types time is a very strong predictor of elasticity patterns, with production (nonproduction) demand becoming progressively more (less) elastic. This result parallels the common finding in studies of wage inequality. Just as there appears to be a large unexplained residual for changing factor prices, there also appears to be a large unexplained residual for changing factor demand elasticities. This paper has four subsequent sections. Section 2 presents the theory of how trade can make factor demands more elastic. Section 3 presents the stage-one regressions: related empirical work, the data, specification issues, and results. Section 4 similarly presents the stage-two regressions. Section 5 concludes.

The goal of this paper has been to determine whether international trade has increased U.S. industries’ equilibrium own-price elasticity of demand for labor. The paper has three main results. First, over time demand for production labor has become more elastic in manufacturing overall and in five of eight industries within manufacturing. The elasticity fluctuated around −0.5 until the mid-1970s, but then it dropped steadily to around −1.0 by 1991. Second, nonproduction-labor demand has not become more elastic in manufacturing overall or in any of the industries within manufacturing. Almost all estimates range somewhere between −0.5 and −0.8, and if anything, demand seems to be growing less elastic over time. Third, the hypothesis that trade contributed to increased elasticities has mixed support, at best. For production labor many trade variables have the predicted effect for specifications containing as regressors only these variables or them plus industry fixed effects. However, these predicted effects generally disappear when time controls are included as well. For nonproduction labor things are somewhat better. Four plausible trade-related variables – narrow and broad outsourcing, the foreign-affiliate share of U.S. multinational corporations’ assets, and net exports as a share of shipments – have the predicted sign at at least the 90% level of significance even when both industry and time controls are included. For both labor types, time itself is a very strong predictor of elasticity patterns. This result parallels the common finding in studies of wage inequality. Just as there appears to be a large unexplained residual for changing factor prices, there also appears to be a large unexplained residual for changing factor demand elasticities.