What is the rationale for benefit-cost analysis (BCA)? The answer is critical for determining how BCA should be conducted and interpreted, and identifying its implications for policy. This article examines two possible justifications for BCA: positive and normative. The positive rationale is...

Using a unique matched employer–employee dataset on Taiwanese manufacturing, we examine the impact of foreign direct investment in China on domestic employment adjustments controlling for firm and worker heterogeneity as well as for potential endogeneity of firms’ expansion in China. Our...