The Effects of Import Competition on Unionization

Abstract

We study direct and indirect effects of Chinese import competition on union membership in the United States, 1990–2014. Import competition in manufacturing induced a modest decline in unionization within manufacturing industries. The magnitude is small because unionized manufacturers competed in higher-quality product segments. Manufacturers in right-to-work states experienced more direct competition with low-quality Chinese imports. Outside of manufacturing, however, import competition causes an important increase in union membership, as less educated women shift away from retail and toward jobs in health care and education where unions are stronger. We calculate that Chinese imports prevented 26 percent of the union density decline that would have otherwise occurred. (JEL F14, F16, J16, J51, L60, P33)