Stalled Racial Progress and Japanese Trade in the 1970s and 1980s

We assess the impact of a rapid rise in Japanese import competition on the growth in racial earnings and employment gaps during the 1970s and 80s. Using commuting zone level variation in exposure, we find Japanese competition led to a decrease in manufacturing employment and labor force participation for blacks. This was driven by a shift in demand for skill in manufacturing. The difference in effects between the 10th percentile most and least exposed commuting zone was equivalent to 36-46% of the relative rise in black non-labor force participation, and 78-96% of the relative decline in black median male earnings.

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