Documents Hanson, Gordon H. 3 results

"China's emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and labor economists."

"Has rising import competition contributed to the polarization of U.S. politics? Analyzing outcomes from the 2002 and 2010 congressional elections and the 2000, 2008, and 2016 presidential elections, we detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by congressional voting records, we find strong evidence that congressional districts exposed to larger increases in import penetration disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts with an initial majority white population or initially in Republican hands became substantially more likely to elect a conservative Republican, while trade-exposed districts with an initial majority-minority population or initially in Democratic hands also become more likely to elect a liberal Democrat. In presidential elections, counties with greater trade exposure shifted towards the Republican candidate. We interpret these results as supporting a political economy literature that connects adverse economic conditions to support for nativist or extreme politicians"

"Society's transition toward more sustainable energy sources is well underway. But substantially reducing the use of fossil fuels to generate electricity, to power vehicles, and to manufacture the stuff of everyday life will profoundly disrupt the communities that currently dedicate themselves to carbon-intensive industries. In this paper, I consider the potential for adverse labor market consequences from the energy transition and the suitability of existing policies to counteract them. Top of mind in this discussion is to avoid repeating the painful adjustment to globalization and automation, which in recent decades brought concentrated job loss and long-lasting economic distress to local labor markets that had been specialized in manufacturing. I begin by mapping the spatial distribution of employment in fossil-fuel-intensive activities across US commuting zones from 2000 forward. Then, using the labor market consequences of the post-1980 decline of coal as a backdrop, I discuss policy options for easing adjustment to the energy transition, including letting market forces work, reinforcing the social safety net, and expanding place-based policies.
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