Three Essays on the Impacts of Trade Liberalization
Author(s)
Yang, Tongyang
Advisor(s)
Lee, Seung Hoon
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Abstract
This dissertation examines how a negative income shock induced by globalization affected US local economies through various channels, including labor market outcomes, crime rates, and poverty.
The first chapter provides empirical results that trade liberalization with China reduced gender gaps in local U.S. labor markets. In MSAs with higher exposure to trade liberalization, the simple wage gender gap decreased, while the residual wage gap increased, indicating important selection effects in labor force participation decisions. The reduction in the gender labor force participation gap was driven by higher entry of women, in particular more educated women, and exit of the less educated men. This results in intrahousehold adjustments in work dynamics, with women entering the labor force to offset the lost income of male partners who left the labor force. We show that trade liberalization increased female workers' unemployment rate and reliance on part-time jobs.
The second chapter provides empirical evidence that regions with higher minimum wage experienced reductions in crime after trade liberalization with China. Estimation shows that a negative income shock resulting from trade liberalization with China caused a rise in property crimes, while a higher minimum wage had a buffering effect on crimes. Notably, the most significant impact was on young adults aged 20-29. A higher minimum wage may bring younger workers to the labor market, thereby reducing potential property crime rates. This chapter suggests that a higher minimum wage could function as a form of insurance as it reduces crime in the presence of a negative income shock.
The third chapter examines US-China trade liberalization's effect on socioeconomic indicators. We employ the Multidimensional Deprivation Index (MDI) and estimate the difference-in-difference model. Results show that young adults aged 17-24 experienced significant multidimensional deprivation mainly due to highschool education deprivation. There may also exist inter-generational spillover effects within the household - parents' labor market displacement due to trade liberalization may impact their children's wellbeing. Additionally, minimum wage and social welfare expenditures do not help alleviate the multidimensionally deprived population. This finding confirms that there was not much overlap between the income poor and those who were multidimensionally deprived.
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Date
2021-07-27
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Dissertation