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Global Value Chains Trade and the Demand for Chinese Labor

Author

Listed:
  • TAO MA

    (Institute of World Economics and Politics Chinese Academy of Social Sciences)

  • BIN SHENG

    (Institute of International Economics Nankai University)

Abstract

Developed countries have recently expanded the outsourcing production to China by transferring intermediate inputs with lower value-added, given the abundant and low-cost labor resources in China. Therefore, intermediate products trade is increasing rapidly, which is major composition of global value chains trade. The change of trade pattern not only increases the demand for various labors in China, but also leads to the change of labor demand and employment stability in labor market. This paper aims to study the effect of intermediate products trade on labor demand in total Chinese industry and sub-sectors by using dynamic panel data model. The results indicate that the intermediate product exports increase the labor demand, while the impact of intermediate product imports on labor demand is negative. Meanwhile, intermediate products trade has increased employment instability and unemployment risk in Chinese manufacturing sector.

Suggested Citation

  • Tao Ma & Bin Sheng, 2017. "Global Value Chains Trade and the Demand for Chinese Labor," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 5(1), June.
    • Handle: RePEc:ntu:ntugeo:vol5-iss1-17-179
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    References listed on IDEAS

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    1. Bob Anderton & Paul Brenton, 2014. "Outsourcing And Low-Skilled Workers In The Uk," World Scientific Book Chapters, in: INTERNATIONAL TRADE, DISTRIBUTION AND DEVELOPMENT Empirical Studies of Trade Policies, chapter 9, pages 185-203, World Scientific Publishing Co. Pte. Ltd..
    2. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-245, May.
    3. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
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    Cited by:

    1. Nolte, Kerstin & Ostermeier, Martin, 2017. "Labour Market Effects of Large-Scale Agricultural Investment: Conceptual Considerations and Estimated Employment Effects," World Development, Elsevier, vol. 98(C), pages 430-446.

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