Import Competition and the Probability of Job Displacement in US Manufacturing, 1983-1999

Book excerpt: The trade-displacement relationship is examined using observations from the 1984-2000 Displaced Worker Surveys and corresponding industry data. Increases in import penetration and decreases in import prices correlate with higher displacement rates. Considerable variation in the effects of import competition on displacement probabilities is found across worker types. For example, the estimated displacement probability for a minority female who is not a union member but who has completed some college coursework ranges from 6.44 to 7.13 percent. This is significantly higher than the range estimated (1.02 to 1.24 percent) for college-educated, white, male union members. Setting import competition values equal to zero, we see estimated displacement probabilities for such workers decrease by 0.05 to 0.07 percentage points. Non-union, minority female workers with some college education realize reductions of 0.40 to 2.56 percentage points in their probabilities. Thus, workers most at risk of displacement are also most affected by import competition.