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Trade Elasticities, Transport Costs, and Employment in U.S. Manufacturing

Year: 2025

Type: article

Abstract: I update the estimates of the trade elasticity of substitution for specific manufacturing industries in Ahmad and Riker (2020) using post-pandemic data on industry profit margins from the 2022 Economic Census. Then I demonstrate how to use these elasticity estimates to simulate the U.S. employment effects of industry-specific changes in the international transport costs of imported final goods. The simulations indicate that a 20% increase in the international transport costs could increase U.S. employment in the manufacturing industries by up to 2.10% and by up to 4,953 workers, depending on the industry’s trade elasticity, import penetration rate, export share, initial employment level, and initial international transport costs.

Source: Staff Working Papers: U.S. International Trade Commission

DOI: 10.71476/a1p1-0778

Author: Riker, David

Institution: United States International Trade Commission

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

OpenAlex ID: W6921376657

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