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The USITC’s Roundtable on the Labor Market Effects of Trade: Discussion Summary

Author(s)

Samira Salem, John Benedetto


Abstract

On October 4, 2012, the United States International Trade Commission (USITC) hosted a roundtable discussion on the labor market effects of trade. The USITC assembled a group of 29 professionals representing a variety of perspectives and experiences for the roundtable discussion. The participants expressed wide-ranging views on how the business cycle influences the labor market effects of trade liberalization, and on the relationship between offshoring and domestic employment. The discussion highlighted recent methodological advances incorporating transition dynamics to measure the costs that workers face in switching sectors. Participants identified four overarching themes. First, recent empirical research suggests that short-term adjustment costs may be more important than previously thought, so there is a need to incorporate labor mobility into trade models in order to better analyze the effects of trade on labor. Second, research also suggests there is a need for comparative general equilibrium (CGE) modeling efforts to continue to expand into examining trade and labor under conditions of less-than-full employment, as well as to examine the impact on the labor market of reducing nontariff barriers in the services sector. Third, participants called for improved access to data—services data, value-added data, and U.S. firm-level data—and proposed new levels of data analysis, that might allow for research on topics like the possible effects of trade on the quality of jobs.


Tags(s): Labor Roundtable