Brandon Enriquez is a PhD student in Department of Economics at MIT. He graduated from the University of Maryland, Baltimore County in 2017 with a BA in mathematics and economics. His main research interests are in labor economics; he has ongoing research projects on racial inequality and on social insurance for low-wage workers.

Abstract

We evaluate the effects of the Japan trade shock on manufacturing employment and whether they were racially disparate. Most importantly, we test whether differential occupational exposure drove racially disparate effects. Using detailed establishment-level data and a shift-share instrumental variables design, we find that the shock caused substantial decreases in overall manufacturing employment and in Black manufacturing operator employment. We find that two-thirds of the decrease in Black operator employment (relative to that of white operators) was due to disparate occupational exposure. Disparate exposure was associated with local anti-Black prejudice. The Japan shock decreased Black income in affected areas, and had persistent effects on Black poverty and joblessness. Taken together, these results show that aggregate sector-level trade shocks can hit minority workers particularly hard when they are concentrated in exposed occupations.

(With Fidan Ana Kurtulus)