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Job Creation and Trade in Manufactures: Industry Level Analysis Across Countries

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  • Admasu Shiferaw

    () (Department of Economics, The College of William and Mary)

  • Degol Hailu

    (United Nations Development Program (UNDP), New York)

Abstract

This paper examines industry level responses of manufacturing employment in the context of globalization using a large sample of developed, developing and transition economies. We find that developing countries need atypically high rates of value added growth (about 10%) to increase manufacturing employment appreciably (about 4%). The employment benefits of export-orientation are also modest even in "comparative advantage" industries of developing countries. However, diversifying the export basket contributes significantly to employment growth, particularly in the medium- and high-technology industries. Import-competition does not undermine employment growth in low-technology industries of developing countries while it displaces jobs in the same industries in OECD and transition economies. For developing countries, import-induced job losses are higher in the more capital-intensive medium-technology industries. Jobs in high-technology industries are less sensitive to imports with positive relationships observed in the OECD. Investment also complements job creation in lowtechnology industries of developing countries that have yet to industrialize.

Suggested Citation

  • Admasu Shiferaw & Degol Hailu, 2015. "Job Creation and Trade in Manufactures: Industry Level Analysis Across Countries," Working Papers 167, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:167
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    More about this item

    Keywords

    Labor Demand; Employment Elasticity; Manufacturing; Export Orientation; Import Competition;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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