When Work Disappears: Empirical Evidence from Sweden of Manufacturing Decline and its Effect on Marriage and Family Formation

Sammanfattning: This thesis examines if local labor demand shocks stemming from increasing manufacturing competition from China shifts the employment status among young adults during the years 1995 to 2018, using data on Swedish municipalities. In the context of labor market uncertainties and family formation decisions, we aim to test whether changes in economic stature affects marriage, fertility and children's living circumstances in Sweden. We exploit gender-specific components within manufacturing industries to allow shocks to differently affect male and female intensive industries. Following the empirical strategy in Autor et al. (2019), we use a Bartik instrument and find a negative effect on the manufacturing employment share. This is consistent with existing literature on the role of Chinese imports in Nordic labor markets. However, we cannot with certainty link the decline in manufacturing with overall employment status, since we do not find statistically significant effects on annual income, unemployment, or idleness. Neither do we obtain any significant effects on the male relative to the female economic stature. Unlike prior research, our analysis suggests that trade shocks affecting male intensive industries increase marriage and fertility rates among young women. As such, our findings could contribute to a more versatile understanding of what happens when manufacturing jobs disappear.