Racial and Ethnic Inequality and the China Shock
2026-07-30
Minority workers tend to be disproportionately harmed by negative economic shocks. Indeed, we show that Hispanic populations experienced worse employment losses, relative to Whites, due to import competition from China largely due to lower education levels. In contrast, Black–White employment and wage gaps actually narrowed due to relative growth in nonmanufacturing sectors. We show that Black workers, compared to Whites, were less attached to manufacturing by 2000 and were therefore more poised to take advantage of China shock–induced reallocation to services. The lasting negative impacts of the China shock on exposed communities were primarily driven by White workers. (JEL F13, F14, F16, J15, J22, J31, R23)