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Why Did Manufacturing Firms Increase the Number of Non-regular Workers in the 2000s? Does international trade matter?

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  • MATSUURA Toshiyuki

Abstract

This paper examines whether there is any link between export openness and the temporary workers ratio at firms. First, we investigate the effect of export openness on sales volatility using Japanese firm-level data. Next, we examine whether firms will increase the number of temporary workers as their sales volatility changes. Finally, we calculate to what extent changes in the temporary workers ratio are attributable to the sales volatility that is caused by exporting. We find statistically significant evidence that a foreign demand shock through exports affects the sales volatility at the firm level and that increases in the sales volatility induce the extensive use of temporary workers. Indeed, we find that those firms that incur a higher fixed employment cost make extensive use of temporary workers when the sales growth volatility rises. However, quantitative evaluation of the effects of exporting on the temporary workers ratio shows that the magnitude of these effects is quite small. We conclude that the impacts of firms' exporting status and export share on the temporary workers ratio are statistically significant but economically negligible in size. Thus, it is not appropriate to attribute the cause of increases in the temporary workers ratio to increased foreign shocks that occur because of exporting.

Suggested Citation

  • MATSUURA Toshiyuki, 2013. "Why Did Manufacturing Firms Increase the Number of Non-regular Workers in the 2000s? Does international trade matter?," Discussion papers 13036, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:13036
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    File URL: https://www.rieti.go.jp/jp/publications/dp/13e036.pdf
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    References listed on IDEAS

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    1. Julian di Giovanni & Andrei A. Levchenko, 2009. "Trade Openness and Volatility," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 558-585, August.
    2. MATSUURA Toshiyuki & SATO Hitoshi & WAKASUGI Ryuhei, 2011. "Temporary Workers, Permanent Workers, and International Trade: Evidence from Japanese firm-level data," Discussion papers 11030, Research Institute of Economy, Trade and Industry (RIETI).
    3. Bernard, Andrew B. & Jensen, J. Bradford, 1997. "Exporters, skill upgrading, and the wage gap," Journal of International Economics, Elsevier, vol. 42(1-2), pages 3-31, February.
    4. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2016. "Do Exporters Really Pay Higher Wages? First Evidence from German Linked Employer–Employee Data," World Scientific Book Chapters,in: Microeconometrics of International Trade, chapter 5, pages 177-213 World Scientific Publishing Co. Pte. Ltd..
    5. Claudia M. Buch & Jörg Döpke & Harald Strotmann, 2009. "Does Export Openness Increase Firm-level Output Volatility?," The World Economy, Wiley Blackwell, vol. 32(4), pages 531-551, April.
    6. Hirokatsu Asano & Takahiro Ito & Daiji Kawaguchi, 2011. "Why Has the Fraction of Contingent Workers Increased? A Case Study of Japan," IDEC DP2 Series 1-3, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    7. MORIKAWA Masayuki, 2010. "Volatility, Nonstandard Employment, and Productivity: An empirical analysis using firm-level data," Discussion papers 10025, Research Institute of Economy, Trade and Industry (RIETI).
    8. Diego Comin & Sunil Mulani, 2006. "Diverging Trends in Aggregate and Firm Volatility," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 374-383, May.
    9. TANAKA Ayumu, 2012. "The Causal Effects of Exporting on Japanese Workers: A firm-level analysis," Discussion papers 12017, Research Institute of Economy, Trade and Industry (RIETI).
    10. Yamamoto Isamu & Matsuura Toshiyuki, 2014. "Effect of Work–Life Balance Practices on Firm Productivity: Evidence from Japanese Firm-Level Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(4), pages 1-32, October.
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    Cited by:

    1. Mitsoyo Ando & Fukunari Kimura, 2015. "Globalization and Domestic Operations: Applying the JC/JD Method to Japanese Manufacturing Firms," Asian Economic Papers, MIT Press, vol. 14(2), pages 1-35, Summer.
    2. MORIKAWA Masayuki, 2013. "What Type of Policy Uncertainty Matters for Business?," Discussion papers 13076, Research Institute of Economy, Trade and Industry (RIETI).

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