Chapter 9 — Further Reading

On the China shock

David Autor, David Dorn, and Gordon Hanson, "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, 2013 The original paper that launched the China shock literature. The methodology and findings are explained clearly in the introduction. Free in many places online.

David Autor, David Dorn, and Gordon Hanson, "The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade," Annual Review of Economics, 2016 A retrospective summary of the China shock literature, written for a general economist audience. Less technical than the original paper. Highly recommended.

David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi, "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure," American Economic Review, 2020 The follow-up paper on the political consequences. Estimates the effect of the China shock on the 2016 election outcome.

Justin Pierce and Peter Schott, "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, 2016 A complementary paper that uses different identification strategies to reach similar conclusions about the China shock's impact on U.S. manufacturing employment.

On NAFTA and the broader history of U.S. trade liberalization

Pietra Rivoli, The Travels of a T-Shirt in the Global Economy, John Wiley & Sons, 2005 Cited in Chapter 3 and worth re-reading after Chapter 9. Rivoli's case study of the global T-shirt supply chain shows what trade looks like in practice across the entire chain from cotton field to final consumer.

Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World, Viking, 2018 Tooze's history of the post-2008 economy includes substantial treatment of the trade and political consequences of globalization. A good complement to the Autor-Dorn-Hanson work.

Daron Acemoglu, David Autor, and David Lyle, "Women, War, and Wages: The Effect of Female Labor Supply on the Wage Structure at Midcentury," Journal of Political Economy, 2004 A different paper but illustrative of how labor economists think about labor-supply shocks in general — useful background for understanding why China shock-style work is structured the way it is.

On trade theory and policy

Paul Krugman, Pop Internationalism, MIT Press, 1996 Cited in earlier chapters and worth re-reading. Krugman's polemic against common confusions about international trade in popular discourse. The book is from the 1990s but the analytical moves remain useful.

Dani Rodrik, The Globalization Paradox, W. W. Norton, 2011 A more recent and more nuanced treatment of trade by an economist who has worked extensively on the topic and is honest about both the benefits and the limits. Rodrik argues for what he calls "smart globalization" — supporting trade but limiting its scope and ensuring adequate compensation for losers.

Jagdish Bhagwati, In Defense of Globalization, Oxford University Press, 2004 A passionate defense of free trade and globalization more broadly, by one of the most influential trade economists of the late 20th century. Bhagwati is honest about the distributional concerns but ultimately concludes that trade is, on balance, strongly positive.

Joseph Stiglitz, Globalization and Its Discontents, W. W. Norton, 2002 A more critical view by another Nobel laureate. Stiglitz argues that the global trading system has been structured in ways that disproportionately benefit wealthy countries and corporations at the expense of workers in developing countries. A useful counterpoint to Bhagwati.

On Trade Adjustment Assistance

John P. Hutchinson, "Trade Adjustment Assistance: A 'New' Approach to Helping Trade-Displaced Workers," Issues in Policy Research, multiple years A series of evaluations of TAA's effectiveness. The findings are generally that TAA has helped some workers but on a very small scale relative to the magnitude of trade displacement.

U.S. Government Accountability Office, Trade Adjustment Assistance: Most Workers in 5 Newly Designated Industries Have Used Adjustment Services, multiple reports Official GAO assessments of TAA's reach and effectiveness. Free online at gao.gov.

On the political economy of trade

Edward Mansfield and Diana Mutz, "Support for Free Trade: Self-Interest, Sociotropic Politics, and Out-Group Anxiety," International Organization, 2009 An empirical study of who supports and opposes free trade in the U.S. — and why. Findings: people's views on trade are shaped less by their personal economic interests than by their sense of national identity and concern about out-groups. Important for understanding the political dynamics.

John Ruggie, "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order," International Organization, 1982 The classic statement of "embedded liberalism" — the idea that successful free trade in the post-WWII era was made politically viable by domestic social safety nets that compensated trade's losers. The framework Ruggie describes is what the U.S. has arguably failed to maintain in the post-1990 era.

A reading order recommendation

If you have time for one of the books above, read Rodrik's The Globalization Paradox. It's the most directly relevant follow-up to Chapter 9 and the most balanced treatment available.

If you want to understand the China shock specifically, read the Autor-Dorn-Hanson 2016 Annual Review of Economics paper. It's accessible, comprehensive, and free.

If you want to see the case for free trade made strongly, read Bhagwati's In Defense of Globalization.

If you want to see the case for skepticism, read Stiglitz's Globalization and Its Discontents.

Chapter 10 — Behavioral Economics — completes Part II. It introduces the systematic ways that real human beings depart from the rational-actor assumption built into the supply-and-demand model — and gives you a lens you'll use for the rest of the book.