Import competition, employment and wages in U.S. manufacturing

This paper uses cointegration analysis to examine if employment and wages in the U.S. manufacturing sector exhibit any long run relationship with import competition. While overall the cointegration analysis supports the results reported in Revenga’s (1992) panel study it indicates that in the long run a positive correlation between import price and employment and/or a negative correlation between import price and wage are sector sensitive. There is also a considerable variation in the magnitude of employment and wage elasticities.