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Trade Technology and Employment: A case Study of South Africa

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Author Info
J. Paul Dunne () (School of Economics, University of the West of England)
Lawrence Edwards () (School of Economics, University of Cape Town)

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Abstract

This paper provides a comprehensive analysis of the impact of trade on employment in South Africa. Firstly, it considers the correlation between trade liberalisation and factor demand in South African manufacturing during the 1990s. Secondly, it investigates the impact of trade on labour using a Chenery (1979) style decomposition technique, following Edwards (2001a, 2001b, 2005b) and Jenkins (2002). It develops the earlier work by exploring both the indirect and the indirect effects and investigating variations in the regional impact of trade on factor demand during the 1990s. This suggests that technological change accounts for the bulk of jobs lost in manufacturing during the 1990s. To investigate, whether this reflects exogenous technological change or trade-induced technological change requires undertaking an econometric analysis and this explores the impact of trade on technological change through an induced labour demand model. This finds a strong effect of exogenous technological progress but only limited evidence that increased trade flows and trade liberalisation induced improvements in labour productivity.

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File URL: http://carecon.org.uk/DPs/0602.pdf
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File Function: First version, 2006
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Publisher Info
Paper provided by University of the West of England, Department of Economics in its series Discussion Papers with number 0602.

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Length: 33 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:uwe:wpaper:0602

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Web page: http://www.uwe.ac.uk/bbs/acad/econ/econ.shtml
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Related research
Keywords: Trade; technology; employment; industrial panel;

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References listed on IDEAS
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  1. Haskel, Jonathan & Slaughter, Matthew, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," CEPR Discussion Papers 1940, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Lawrence Edwards, 2004. "A firm level analysis of trade, technology and employment in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 45-61. [Downloadable!]
  3. Lawrence Edwards & Phil Alves, 2006. "South Africa'S Export Performance: Determinants Of Export Supply," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 473-500, 09. [Downloadable!] (restricted)
  4. Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September. [Downloadable!] (restricted)
  5. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March. [Downloadable!] (restricted)
    Other versions:
  6. Gunnar Jonsson & Arvind Subramanian, 2000. "Dynamic Gains from Trade - Evidence from South Africa," IMF Working Papers 00/45, International Monetary Fund.
  7. Trevor Serge Coleridge Alleyne & Arvind Subramanian, 2001. "What Does South Africa's Pattern of Trade Say About Its Labor Markets?," IMF Working Papers 01/148, International Monetary Fund. [Downloadable!]
  8. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May. [Downloadable!] (restricted)
  9. L Edwards, 2001. "Globalisation And The Skills Bias Of Occupational Employment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 69(1), pages 40-71, 03. [Downloadable!] (restricted)
  10. Mathias Thoenig & Thierry Verdier, 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 709-728, June. [Downloadable!]
    Other versions:
  11. Lawrence Edwards & StephenS. Golub, 2003. "South African Productivity And Capital Accumulation In Manufacturing: An International Comparative Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 71(4), pages 659-678, December. [Downloadable!] (restricted)
  12. Robert E. Baldwin, 1995. "The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages," OECD Jobs Study Working Papers 4, OECD, Directorate for Employment, Labour and Social Affairs. [Downloadable!]
  13. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," World Bank Economic Review, Oxford University Press, vol. 11(1), pages 17-32, January.
  14. Pavcnik, Nina, 2002. "Trade Liberalization, Exit, and Productivity Improvement: Evidence from Chilean Plants," Review of Economic Studies, Blackwell Publishing, vol. 69(1), pages 245-76, January.
    Other versions:
  15. Berman, Eli & Machin, Stephen, 2000. "Skill-Based Technology Transfer around the World," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 12-22, Autumn.
  16. Robert E. Baldwin, 1995. "The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages," NBER Working Papers 5037, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09. [Downloadable!] (restricted)
  19. Edwards, Lawrence & Golub, Stephen S., 2004. "South Africa's International Cost Competitiveness and Exports in Manufacturing," World Development, Elsevier, vol. 32(8), pages 1323-1339, August. [Downloadable!] (restricted)
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