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CTRL+EXP+DEL: the Domestic Costs of U.S. Export Controls
August 2026
Working Paper Number:
CES-26-50
National-security restrictions on exports constrain exporters' market access, but empirical evidence on their domestic costs is limited. We leverage data on export transactions that includes the product classifications used to administer U.S. export controls to document a doubling in the share of U.S. exports subject to controls between 2010 and 2024 and a skewed firm-size distribution among firms that export controlled products. We then exploit the 2014 U.S. restriction on exports to Russia as a natural experiment to examine the impact of export controls on firm-level outcomes. These controls not only reduced U.S. firms' probability of exporting targeted goods to Russia but also had indirect effects: they reduced affected firms' exports of other products and to other destinations and lowered affected firms' average payroll. Our findings imply that the domestic costs of export controls extend beyond direct restrictions.
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Minimum Wages and the Rise of the Robots
July 2026
Working Paper Number:
CES-26-42
This paper studies how minimum wage policy affects firms' adoption of automation'technologies. Using both state-level measures of robot exposure and novel plant-level'data on industrial robot imports linked to U.S. Census microdata from 1992'2021,'we show that increases in minimum wages raise the likelihood of robot adoption in'manufacturing. Our preferred identification exploits discontinuities at state borders,'comparing otherwise similar firms exposed to different wage floors. Across specifications, a 10 percent increase in the minimum wage increases robot adoption by roughly'8 percent relative to the mean.
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An Anatomy of U.S. Establishments' Trade Linkages in Global Value Chains
June 2025
Working Paper Number:
CES-25-44
Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using confidential microdata from the U.S. Census Bureau, we develop novel measures of the linkages between U.S. manufacturing establishments' imports and exports. We find that for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017. Examining GVC trade flows in a gravity framework, we find that these flows are higher within 'round-trip' (input and output market is the same) linkages, regional trade agreements, and multinational firm boundaries. The strong complementarities between input and output markets are muted by the proportionality assumptions embedded in global input-output tables. Finally, with an off-the-shelf model, we show the round-trip results can be obtained when firm-specific sourcing and exporting fixed costs are linked.
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The China Shock Revisited: Job Reallocation and Industry Switching in U.S. Labor Markets
October 2024
Working Paper Number:
CES-24-65
Using confidential administrative data from the U.S. Census Bureau we revisit how the rise in Chinese import penetration has reshaped U.S. local labor markets. Local labor markets more exposed to the China shock experienced larger reallocation from manufacturing to services jobs. Most of this reallocation occurred within firms that simultaneously contracted manufacturing operations while expanding employment in services. Notably, about 40% of the manufacturing job loss effect is due to continuing establishments switching their primary activity from manufacturing to trade-related services such as research, management, and wholesale. The effects of Chinese import penetration vary by local labor market characteristics. In areas with high human capital, including much of the West Coast and large cities, job reallocation from manufacturing to services has been substantial. In areas with low human capital and a high initial manufacturing share, including much of the Midwest and the South, we find limited job reallocation. We estimate this differential response to the China shock accounts for half of the 1997-2007 job growth gap between these regions.
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Multinational Production and Innovation in Tandem
October 2024
Working Paper Number:
CES-24-64
Multinational firms colocate production and innovation by offshoring them to the same host country or region. In this paper, I examine the determinants of multinational firms' production and innovation locations. Exploiting plausibly exogenous variations in tariffs, I find complementarities between production and innovation within host countries and regions. To evaluate manufacturing reshoring policies, I develop a quantitative multicountry offshoring location choice model. I allow for rich colocation benefits and cross-country interdependencies and prove supermodularity of the model to solve this otherwise NP-hard problem. I find the effects of manufacturing reshoring policies are nonlinear, contingent upon firm heterogeneity, and they accumulate dynamically.
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Supply Chain Adjustments to Tariff Shocks: Evidence from Firm Trade Linkages in the 2018-2019 U.S. Trade War
August 2024
Working Paper Number:
CES-24-43
We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer'foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019.
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Accounting for Trade Patterns
February 2024
Working Paper Number:
CES-24-07
We develop a quantitative framework for decomposing trade patterns. We derive price indexes that determine comparative advantage and the aggregate cost of living. If firms and products are imperfect substitutes, we show that these price indexes depend on variety, average appeal (including quality), and the dispersion of appeal-adjusted prices. We show that they are only weakly related to standard empirical measures of average prices. We find that 40 percent of the cross-section variation in comparative advantage, and 90 percent of the time-series variation, is accounted for by variety and average appeal, with less than 10 percent attributed to average prices.
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Who's Most Exposed to International Shocks? Estimating Differences in Import Price Sensitivity across U.S. Demographic Groups
March 2023
Working Paper Number:
CES-23-13R
Differences in consumption patterns across demographic groups mean that international price shocks differentially affect such groups. We construct import price indexes for U.S. households that vary by age, race, marital status, education, and urban status. Black households and urban households experienced significantly higher import price inflation from 1996-2018 compared to other groups, such as white households and rural households. Sensitivity to international price shocks varies widely, implying movements in exchange rates and foreign prices, both during our sample and during the Covid-19 pandemic, drove sizable differences in import price inflation ' and total inflation ' across households.
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U.S. Market Concentration and Import Competition
August 2022
Working Paper Number:
CES-22-34
Many studies have documented that market concentration has risen among U.S. firms in recent decades. In this paper, we show that this rise in concentration was accompanied by tougher product market competition due to the entry of foreign competitors. Using confidential census data covering the universe of all firm sales in the U.S. manufacturing sector, we find that rising import competition increased concentration among U.S. firms by reallocating sales from smaller to larger U.S. firms and by causing firm exit. However, this increase in concentration was counteracted by the expansion of foreign firms, which reduced domestic firms' share of the U.S. market inclusive of foreign firms' sales. We find that once the sales of foreign exporters are taken into account, U.S. marketconcentration in manufacturing was stable between 1992 and 2012.
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Structural Change Within Versus Across Firms: Evidence from the United States
June 2022
Working Paper Number:
CES-22-19
We document the role of intangible capital in manufacturing firms' substantial contribution to
non-manufacturing employment growth from 1977-2019. Exploiting data on firms' 'auxiliary' establishments, we develop a novel measure of proprietary in-house knowledge and show that it
is associated with increased growth and industry switching. We rationalize this reallocation in a
model where irms combine physical and knowledge inputs as complements, and where producing
the latter in-house confers a sector-neutral productivity advantage facilitating within-firm structural
transformation. Consistent with the model, manufacturing firms with auxiliary employment pivot towards services in response to a plausibly exogenous decline in their physical input prices.
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