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Sectoral job effects of trade: An input-output analysis for Germany

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  • Lurweg, Maren
  • Oelgemöller, Jens
  • Westermeier, Andreas
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    Abstract

    The current globalisation process is characterized by the emergence of global value chains. That is, production processes are becoming increasingly geographically fragmented. Not only are final goods traded internationally, but in particular, trade in intermediate goods and services has increased significantly over time. In the industrialised countries, the manufacturing sectors were the first that were compelled to face the challenges of globalisation. When services were still considered non-tradable, manufacturing firms had already decided to relocate their production sites to developing or emerging economies, due to lower wage levels abroad and increasing price competition domestically. In this paper, we use input-output analysis to explore the relationship between trade and both job creation and job destruction in the German manufacturing industry in 2005. The results show that being integrated into the world economy is advantageous for the German economy. In 2005, the net exports of the manufacturing industries led to trade-induced job gains of around 2,400,000. This figure is equivalent to 6.2 per cent of total German employment. Furthermore, the job effects of trade were positive for a large majority of countries. The greatest job gains resulted from trade with the United States, the United Kingdom and France. Interestingly, even trade with the new EU Member States is beneficial in terms of job creation. --

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    Bibliographic Info

    Paper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 19.

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    Date of creation: 2010
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    Handle: RePEc:zbw:cawmdp:19

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    Keywords: input-output analysis; international trade; employment;

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    References

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    1. Danièle Meulders & François Rycx & Robert Plasman, 2004. "Minimum Wages, low pay and unemployment: introduction," ULB Institutional Repository 2013/7704, ULB -- Universite Libre de Bruxelles.
    2. Danièle Meulders & Robert Plasman & François Rycx, 2004. "Minimum wages, low pay and unemployment," ULB Institutional Repository 2013/7740, ULB -- Universite Libre de Bruxelles.
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    8. Marin, Dalia, 2004. "'A Nation of Poets and Thinkers' - Less So with Eastern Enlargement? Austria and Germany," Discussion Papers in Economics, University of Munich, Department of Economics 329, University of Munich, Department of Economics.
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    13. Erica L. Groshen & Bart Hobijn & Margaret M. McConnell, 2005. "U.S. jobs gained and lost through trade: a net measure," Current Issues in Economics and Finance, Federal Reserve Bank of New York, Federal Reserve Bank of New York, vol. 11(Aug).
    14. Kowalewski, Julia, 2009. "Methodology of the input-output analysis," HWWI Research Papers 1-25, Hamburg Institute of International Economics (HWWI).
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    Cited by:
    1. Surugiu, Marius-Răzvan & Surugiu, Camelia, 2010. "Comparative structural approaches regarding relevant indicators of Input-Output analysis at macro and sectoral level: a case study of some European Union countries," MPRA Paper 23772, University Library of Munich, Germany, revised 25 Oct 2010.

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