Protection, Trade, and Wages: Evidence from U.S. Manufacturing

This paper investigates the effects of international trade policy on wages in U.S. manufacturing industries in 1983. The data set combines micro labor market data with comprehensive data on tariffs and nontariff trade barriers such as quotas and antidumping duties. The authors find that workers in unprotected, export-oriented industries had higher wages than workers with similar observable characteristics in protected, import-competing industries; more specifically, exports had a positive wage effect and imports had a smaller negative wage effect. Other findings are that nontariff barriers had no significant effect on wages, and tariffs appear to have had a large negative wage effect, even after the authors control for the trade protection received by low-wage industries.