U.S. production technology and the effects of imports on the demand for primary factors

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We employ a unit cost function, in the context of the production theory approach, to estimate the Allen-Uzawa effect of various categories of imports on U.S. primary factors. To circumvent curvature-related problems, often associated with similar studies that do not invoke separability, we combine the global imposition of concavity with a symmetric normalized quadratic representation of the unit cost function (which remains flexible after curvature enforcing reparameterizations). Challenging conventional wisdom, we find that the positive, downstream-production-related, employment effects of the majority of imports are significant enough to produce a detectable net increase in labor demand.

Original languageEnglish
Pages (from-to)480-483
Number of pages4
JournalReview of Economics and Statistics
Issue number3
Publication statusPublished - 1 Jan 1998

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