Untangling <scp>US</scp> Employment Changes: Production Technology Versus Trade Structure

ABSTRACT This paper quantifies how much trade structure and production technology changes contribute to US employment changes. We apply a structural decomposition analysis (SDA) to global input–output tables. SDA extends the conventional shift‐share analysis and splits employment changes into the contributions by several drivers. We find that trade structure and production technology changes contribute to a decrease in US employment, but the contribution of production technology changes is substantially larger. Our results also corroborate the skill‐ and routine‐biased technological change hypotheses. That is, changes in production technology decreased low‐ and medium‐skilled or routine employment more than high‐skilled or non‐routine employment.