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Employment Resilience through Services Exports? Evidence from Matched Employer-Employee Data

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  • Pedro S. Martins

Abstract

Can increased exports of services make a significant contribution to employment resilience during recessions? We study the case of Portugal between 2007 and 2013, a period that includes both a major downturn and a number of structural reforms. Our methodology is based on matched employer-employee panel data and a simple difference-in-differences approach, contrasting service sectors, including those with greater export potential, with other sectors. We find that the employment levels of service sectors exhibit relative increases of approximately 10% in 2012-13. We also find that foreign direct investment explains an important part of this positive employment effect. Overall, our results support the view that services exports can accelerate macroeconomic adjustment, particularly when countries are able to attract foreign capital.

Suggested Citation

  • Pedro S. Martins, 2016. "Employment Resilience through Services Exports? Evidence from Matched Employer-Employee Data," Working Papers 79, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  • Handle: RePEc:cgs:wpaper:79
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    File URL: http://webspace.qmul.ac.uk/pmartins/CGRWP79.pdf
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    References listed on IDEAS

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    1. Pedro Martins & Luca David Opromolla, 2011. "Why Ex(Im)porters Pay More: Evidence from Matched Firm-Worker Panels," Working Papers w201123, Banco de Portugal, Economics and Research Department.
    2. Pedro S. Martins, 2016. "The third worker: Assessing the trade-off between employees and contractors," Working Papers 75, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    3. Hijzen, Alexander & Martins, Pedro S., 2016. "No Extension Without Representation? Evidence from a Natural Experiment in Collective Bargaining," IZA Discussion Papers 10204, Institute for the Study of Labor (IZA).
    4. Pedro S. Martins & Sofia Pessoa e Costa, 2014. "Reemployment and Substitution Effects from Increased Activation: Evidence from Times of Crisis," FEUNL Working Paper Series wp590, Universidade Nova de Lisboa, Faculdade de Economia.
    5. Martins, Pedro S., 2016. "Should the Maximum Duration of Fixed-Term Contracts Increase in Recessions? Evidence from a Law Reform," IZA Discussion Papers 10206, Institute for the Study of Labor (IZA).
    6. Pedro S. Martins, 2016. "Can overtime premium flexibility promote employment? Firm-and worker-level evidence from a labour law reform," FEUNL Working Paper Series wp607, Universidade Nova de Lisboa, Faculdade de Economia.
    7. Pedro S. Martins, 2009. "Dismissals for Cause: The Difference That Just Eight Paragraphs Can Make," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 257-279, April.
    8. Hijzen, Alexander & Martins, Pedro S. & Schank, Thorsten & Upward, Richard, 2013. "Foreign-owned firms around the world: A comparative analysis of wages and employment at the micro-level," European Economic Review, Elsevier, vol. 60(C), pages 170-188.
    9. Alexander Hijzen & Mauro Pisu & Richard Upward & Peter W. Wright, 2011. "Employment, job turnover, and trade in producer services: UK firm-level evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 1020-1043, August.
    10. Pedro Martins & Yong Yang, 2009. "The impact of exporting on firm productivity: a meta-analysis of the learning-by-exporting hypothesis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 431-445.
    11. Pedro S. Martins & Yong Yang, 2015. "Globalized Labour Markets? International Rent Sharing Across 47 Countries," British Journal of Industrial Relations, London School of Economics, vol. 53(4), pages 664-691, December.
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    More about this item

    Keywords

    Exports of services; unemployment; labour reforms;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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