U.S. Job Flows and the China Shock

International trade exposure affects job creation and destruction along the intensive margin (job flows due to expansions and contractions of firms’ employment) as well as along the extensive margin (job flows due to births and deaths of firms). This paper uses 1992-2010 yearly employment data from the universe of U.S. establishments to construct job flows at both the industry and commuting-zone levels, and then estimates the impact of import exposure from China on each job-flow type. We find that the ‘China shock’ affects U.S. employment mainly through deaths of establishments. At the commuting-zone level, we find evidence of job reallocations from the Chinese-competition exposed sector to the nonexposed sector. This happens in spite of a reduction in the nonexposed sector’s gross rate of job creation because of an even greater reduction in the gross rate of job destruction. JEL Classification: F14, F16