Kako so ZDA potonile v socialno in politično polarizacijo

David Autor iz MIT, eden najboljših ekonomistov s področja ekonomike dela in eden izmed trojice avtorjev (Autor, Dorn, Hanson) dveh trenutno najbolj vročih ekonomskih raziskav (tukaj in tukaj), v intervjuju za The Region, spletni portal podružnice Federal Reserve v Minneapolisu, pojasnjuje njegovo intelektualno evolucijo v spoznavanju učinkov sproščene trgovine na gospodarstvo. Pojasnjuje, kako je s soavtorji v nasprotju s predpostavkami trgovinskih modelov odkrival, da liberalizacija trgovine nima hitrih ravnotežnih učinkov. Nasprotno, bolj intenzivna globalizacija, predvsem s Kitajsko, je z zapiranjem domače proizvodnje in selitvijo delovnih mest v Latinsko Ameriko in Azijo pustila globoke rane v posameznih regijah. Nekatere regije se tudi po 15 letih niso pobrale, pač pa jih še vedno pesti depresiven trg dela. Vplivala je tudi na odločitve glede formiranja družin, na zmanjšano rodnost, na vrzel v plačah glede na spolno strukturo zaposlenih itd. Ta polarizacija na trgu dela in posledična socialna polarizacija pa sta za seboj potegnili tudi politično polarizacijo – v regijah, ki jih opustošila globalizacija, so volilci začeli voliti bolj ekstremne politike. Trump in Sanders sta posledica zanikanja problema oziroma neuspešnega odgovora liberalizacijo trgovine z redistributivnimi politikami, ki bi kompenzirale izgube “luzerjev” v tej globalizacijski epizodi.

Zelo dober intervju. Tudi zato,  ker – na zelo zanimivi temi – pokaže, kako so intelektualno pošteni raziskovalci sposobni spremeniti stališča, kadar v raziskovanju trčijo na nova dejstva.

Region: Ten or 15 years ago, there was a broad consensus among economists that trade liberalization was largely beneficial, at least in theory.

Autor: Yes, beneficial in aggregate—and just as important, there were no detectable adverse consequences in terms of income distribution.

Region: Right. But as China became a global economic power, the consensus that trade liberalization was benign grew less solid. Trade with China—and globalization more broadly—appeared to be contributing to unemployment and inequality in the United States and elsewhere.

You’ve looked at this very closely, often with David Dorn and Gordon Hanson, analyzing the impact of import competition, from China in particular. In a recent working paper, you suggest that economists must “more convincingly estimate the gains from trade,” and you argue that “developing effective tools for managing and mitigating the cost of trade adjustment should be high on the agenda for policymakers and applied economists.”

What empirical evidence led you to so strongly question the theoretical benefits? That paper looked at job churn and lifetime income, and your Journal of Labor Economics paper with Acemoglu and Price as well as Dorn and Hanson, estimated job losses as high as 2 million to 2.4 million.

Autor: That 2 million number is something of an upper bound, as we stress. Stepping back, I was raised on the consensus view that trade—and globalization more broadly—had not been an important disequalizing force for income distribution in developed-country labor markets. A large chunk of my thesis research analyzed the sources of rising inequality. If you were studying inequality at that time, you were very aware of the debate about whether this trend was primarily due to trade, to technology, to unions or to all kinds of other forces.

The trade and technology discussion was interesting because trade economists and labor economists came at the same problem from very different angles and reached the same conclusion: that globalization had not been a big factor in the rise of U.S. inequality. That was the right conclusion for that time period. The data that they were looking at was through the early ’90s. A lot of the final papers on that topic were published around 2000 in the Journal of International Economics by Krugman and by Leamer. So it was a consensus view.

This experience taught me that if you’re studying the impact of technological change, which is a general equilibrium phenomenon, you need to be thinking about all of the general equilibrium forces, trade being the most natural one. So I’ve been teaching trade in grad labor since I was hired by MIT in 1999.

Region: So you were teaching this as the transformation was taking place, in a sense.

Autor: Yes, but it was about five years ago that David Dorn, Gordon Hanson and I started working on this. And we started on it because, one, the facts were striking, in terms of how much globalization had progressed since the conversation ended around 2000, and two, we felt we had a methodology to get at it that we didn’t have before.

The first paper that Gordon, David and I wrote built on the work that Dorn and I had done in another paper on labor market polarization that appeared in the American Economic Review in 2013. That paper broke U.S. labor markets into commuting zones. […]

For our analysis of the impact of the China shock on U.S. labor markets, we use only the component of rising China—U.S. import penetration that is shared with these other countries—that is, we use the component that we can confidently attribute to China’s improved competitive position.1

We take these predicted changes in import penetration into the United States by goods category, and then we project that down to these commuting zones, looking at the geographic structure of U.S. manufacturing employment. Manufacturing is always very geographically concentrated. When you’re talking about furniture, for example, you’re talking about Tennessee or the Carolinas; you’re not talking about 50 states making furniture. The same is true if you’re talking about toys or leather goods or textiles—they’re very localized.

So that was the strategy; we thought it was a good idea, and we didn’t have a strong prior about what we would find. We thought we would find contraction of import-competing manufacturing employment, and we did. That was not surprising, but what happens after that was an unknown.

We were quite startled by how slow and incomplete the adjustment process was and the fact that you didn’t see offsetting gains in employment in other sectors. You see people entering unemployment or exiting the labor force, and wages falling modestly, but much adjustment was on the employment margin, not the earnings margin.

That is another thing that differentiated what we were doing. Historically, trade economists have relied upon full employment models, where people may lose jobs but they don’t lose work per se because they are quickly reallocated across sectors. According to such models, you should expect markets to clear by wages falling. But, in fact, what tends to happen is that people lose employment, and wages don’t really change for those who stay in employment.

Similarly, if we were in full general equilibrium all the time, the commuting zone would be irrelevant as an outcome measure because markets would clear nationally. The local shock is geographically dissipated because there’s effectively a law of one price of skill. And if that law did not hold in the very short run, workers would move to areas with higher wages until wages were again equalized. But it turns out that not only are the trade shocks locally concentrated—due to the concentrated geography of manufacturing—they also primarily play out locally. Much of the pain of adjustment is borne at the point of impact.

Region: And this is seen in the fact that market adjustment is so slow.

Autor: Yes. At the level of commuting zones, looking at workers initially in the impacted industry, you just don’t see the kind of diffusion or reallocation that general equilibrium models suggest. It’s not that it doesn’t happen eventually, but it happens slowly and painfully.

Anyone who has studied trade theory at even a basic level understands that trade is not Pareto improving: Trade causes prices to adjust, and so it creates winners and losers. It’s the Stolper-Samuelson theorem, that goods prices feed into factor prices, so if you’re an owner of a factor that suddenly becomes relatively abundant due to trade, you have a real fall in income.

And that’s the good scenario—which occurs in a world where there are no frictions! In a world where there are frictions, you have those same costs plus the adjustment costs.

Region: And that is something trade economists hadn’t looked at: the adjustment costs.

Autor: They hadn’t generally seen them as a first-order concern. To a labor economist, large worker adjustment costs are not altogether surprising. There’s an eminent labor literature starting with Jacobson, LaLonde and Sullivan in 1993 that shows when people are involuntarily displaced from long-term jobs, they experience deep enduring scars, in terms of lost earning, lost employment and even lost years of life. We know that the adjustment process is just as costly for career workers.

So at some level, it’s not surprising that we would find those same things when we looked at a trade shock. But we were startled by the magnitude and the robustness of the results. When we wrote that paper that you saw in February, that was a summary paper for the Annual Review of Economics. It encapsulated the last five years of work we have done, and we didn’t think it was going to get much attention, actually, because putting it in the Annual Review is basically saying, you know, graduate students will have to read this paper because it will be on their syllabus. It’s not exactly splashing across the CNN home page.

So we were startled when it got so much attention. One part of this is that we did not write it as a cut-and-dry literature review. We took the opportunity to say, “Here’s what we’ve done, here’s how we think about it, here’s how we think you should think about it.” It’s thematic much more than a typical journal paper. And then the timing with the presidential campaign and all of the contentious rhetoric about trade, and so on … it really got picked up.

Region: Let me ask you about one of the scars caused by trade shocks. In other recent work, again, with Dorn and Hanson, you studied the effects of rising import competition from China on marriage rates and child rearing in the United States and discovered that import shocks that affect male (not female) employment reduce marriage rates and fertility and increase the percentage of children living in poverty and/or single households. It’s not altogether shocking—it’s part of Gary Becker’s classic model of marriage—but the implications are really disturbing. Can you talk a bit about the study and the findings?

Autor: Sure. This is related to another line of work that I’ve done with my student, Melanie Wasserman (now an assistant professor at UCLA Anderson [School of Business]), David Figlio at Northwestern, Jeff Roth at University of Florida and Kris Karbownik, also at Northwestern.

Region: This is the Florida gender gap study? I’d like to ask you about that later.

Autor: Yes. Melanie and I started on this line of work a few years ago, trying to look at the interaction between the labor market and the marriage market. There has been this dramatic decline in marriage rates among low-education, noncollege-educated adults in the United States. And it’s very clear, too, as a stylized fact, that for groups of men who have experienced real declines in earnings, marriage rates have fallen dramatically for women of the same race and education groups; that is, the women who would be most likely to marry them.

Our operative hypothesis is that the declining [labor market] opportunities of low-skilled males have changed household structure, arguably to the detriment of kids, even more so for boys, in fact.

That was the idea we wanted to explore using the trade shock. Our thought was that the trade shock provides a very concentrated change in the opportunity set faced by workers, but particularly men; let’s see if that plays out in terms of reductions in marriage and changes in household structure.

We’re still working on that hypothesis. We have a much more detailed set of results that are not yet in the paper about how the wage structure changes and specifically how it falls: Men’s wages fall sharply relative to women’s wages. We also find, also not yet in the paper, that the trade shock causes a fall in the virtual sex ratio—that is, the ratio of men to women in a given age bracket—within the affected commuting zone. We’re trying now to determine if that’s due to incarceration, mobility or military service (or mortality—though probably not enough to move the sex ratio needle).

And, yes, the trade shock leads to a decline in fertility, which we expected. It does not lead to a rise in nonmarital fertility, but it does lead to a rise in the share of births that are nonmarital births. And, of course, due to the reduction in marriage formation, it means more kids are going to be living in single-parent, impoverished households.

I want to emphasize that my [research] agenda is not to document the ill effects of trade on outcomes A through Z. One part of the agenda is to say, “Hey, here’s a remarkable historical trade event: China’s swift emergence as a technologically advanced, low-cost manufacturing leader. Let’s use that to study how a rapid shift in the trading landscape affects labor markets in competing countries.” Someone once said, “Never let a serious crisis go to waste.” As a labor economist, I’d say the same thing about a major exogenous shock: Don’t waste it; let’s understand how it plays out in labor markets.

And the second part of the agenda is to think about it more broadly; China’s rise provides a big economic shock that’s distinct and well measured at the industry and geographic level. We can use that shock to examine lots of outcomes—not just trade patterns—where we want to know, “What does change in the opportunity set faced by workers do, in that case, to household structure?”

This agenda is far from complete. We have another paper on the impact of the China shock on U.S. political outcomes. We have another studying patenting and innovative activity by firms that are in sectors facing sharp increases in competition.

Vir: The Region

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