US PRODUCTION TECHNOLOGY AND THE EFFECTS OF IMPORTS ON THE DEMAND FORPRIMARY FACTORS

We employ a unit cost function, in the context of the production theor y approach, to estimate the Allen-Uzawa effect of various categories o f imports on U. S. primary factors. To circumvent curvature-related pr oblems, often associated with similar studies that do not invoke separ ability, we combine the global imposition of concavity with a symmetri c normalized quadratic representation of the unit cost function (which remains flexible after curvature enforcing reparameterizations). Chal lenging conventional wisdom, we find that the positive, downstream-pro duction-related, employment effects of the majority of imports are sig nificant enough to produce a detectable net increase in labor demand.