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Trade Technology and Employment: A case Study of South Africa

  • J. Paul Dunne

    ()

    (School of Economics, University of the West of England)

  • Lawrence Edwards

    ()

    (School of Economics, University of Cape Town)

This paper provides a comprehensive analysis of the impact of trade on employment in South Africa. Firstly, it considers the correlation between trade liberalisation and factor demand in South African manufacturing during the 1990s. Secondly, it investigates the impact of trade on labour using a Chenery (1979) style decomposition technique, following Edwards (2001a, 2001b, 2005b) and Jenkins (2002). It develops the earlier work by exploring both the indirect and the indirect effects and investigating variations in the regional impact of trade on factor demand during the 1990s. This suggests that technological change accounts for the bulk of jobs lost in manufacturing during the 1990s. To investigate, whether this reflects exogenous technological change or trade-induced technological change requires undertaking an econometric analysis and this explores the impact of trade on technological change through an induced labour demand model. This finds a strong effect of exogenous technological progress but only limited evidence that increased trade flows and trade liberalisation induced improvements in labour productivity.

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File URL: http://carecon.org.uk/DPs/0602.pdf
File Function: First version, 2006
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Paper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 0602.

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Length: 33 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:uwe:wpaper:0602
Contact details of provider: Postal: 0117 328 3610
Phone: 0117 328 3610
Web page: http://www1.uwe.ac.uk/bl/research/bristoleconomics.aspx

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  1. By Gunnar Jonsson & Arvind Subramanian, 2001. "Dynamic Gains from Trade: Evidence from South Africa," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 8.
  2. L Edwards, 2001. "Globalisation And The Skills Bias Of Occupational Employment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 69(1), pages 40-71, 03.
  3. Mathias Thoenig & Thierry Verdier, 2003. "A Theory of Defensive Skill-Biased Innovation and Globalization," American Economic Review, American Economic Association, vol. 93(3), pages 709-728, June.
  4. Edwards, Lawrence & Golub, Stephen S., 2004. "South Africa's International Cost Competitiveness and Exports in Manufacturing," World Development, Elsevier, vol. 32(8), pages 1323-1339, August.
  5. Nina Pavcnik, 2000. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants," NBER Working Papers 7852, National Bureau of Economic Research, Inc.
  6. H. Bhorat & J. Hodge, 1999. "Decomposing Shifts in Labour Demand in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 67(3), pages 155-168, 09.
  7. Haskel, Jonathan & Slaughter, Matthew, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," CEPR Discussion Papers 1940, C.E.P.R. Discussion Papers.
  8. Matthew J. Slaughter, 1998. "What Are the Results of Product-Price Studies and What Can We Learn From Their Differences?," NBER Working Papers 6591, National Bureau of Economic Research, Inc.
  9. Lawrence Edwards, 2004. "A firm level analysis of trade, technology and employment in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 45-61.
  10. Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September.
  11. Berman, Eli & Machin, Stephen, 2000. "Skill-Based Technology Transfer around the World," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 12-22, Autumn.
  12. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  13. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," World Bank Economic Review, World Bank Group, vol. 11(1), pages 17-32, January.
  14. Lawrence Edwards & Alberto Behar, 2005. "Trade liberalisation and labour demand within South African manufacturing firms," Working Papers 06, Economic Research Southern Africa.
  15. Lawrence Edwards & StephenS. Golub, 2003. "South African Productivity And Capital Accumulation In Manufacturing: An International Comparative Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 71(4), pages 659-678, December.
  16. Lawrence Edwards & Phil Alves, 2006. "South Africa'S Export Performance: Determinants Of Export Supply," South African Journal of Economics, Economic Society of South Africa, vol. 74(3), pages 473-500, 09.
  17. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
  18. Robert E. Baldwin, 1995. "The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages," OECD Jobs Study Working Papers 4, OECD Publishing.
  19. Arvind Subramanian & Trevor Serge Coleridge Alleyne, 2001. "What Does South Africa's Pattern of Trade Say About its Labor Markets?," IMF Working Papers 01/148, International Monetary Fund.
  20. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
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