International trade, employment and earnings: Evidence from US rural counties

Rural manufacturers in advanced countries are considered highly vulnerable to competition from international imports. Yet only limited empirical attention has been paid to the effects of trade on rural economies. This paper investigates the effects of international trade on rural manufacturing economies in the US and compares the effects of trade pressures in rural versus urban areas. Our results indicate that lower export prices are associated with increased manufacturing employment and earnings in both rural and urban counties, while lower import prices are associated with reduced rural employment but increased urban employment. Greater export orientation is associated with lower employment and earnings in both rural and urban counties, while import orientation has mixed effects.