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Sectoral job effects of trade: An input-output analysis for Germany

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  • Lurweg, Maren
  • Oelgemöller, Jens
  • Westermeier, Andreas

Abstract

The current globalisation process is characterized by the emergence of global value chains. That is, production processes are becoming increasingly geographically fragmented. Not only are final goods traded internationally, but in particular, trade in intermediate goods and services has increased significantly over time. In the industrialised countries, the manufacturing sectors were the first that were compelled to face the challenges of globalisation. When services were still considered non-tradable, manufacturing firms had already decided to relocate their production sites to developing or emerging economies, due to lower wage levels abroad and increasing price competition domestically. In this paper, we use input-output analysis to explore the relationship between trade and both job creation and job destruction in the German manufacturing industry in 2005. The results show that being integrated into the world economy is advantageous for the German economy. In 2005, the net exports of the manufacturing industries led to trade-induced job gains of around 2,400,000. This figure is equivalent to 6.2 per cent of total German employment. Furthermore, the job effects of trade were positive for a large majority of countries. The greatest job gains resulted from trade with the United States, the United Kingdom and France. Interestingly, even trade with the new EU Member States is beneficial in terms of job creation.

Suggested Citation

  • Lurweg, Maren & Oelgemöller, Jens & Westermeier, Andreas, 2010. "Sectoral job effects of trade: An input-output analysis for Germany," CAWM Discussion Papers 19, University of Münster, Center of Applied Economic Research Münster (CAWM).
  • Handle: RePEc:zbw:cawmdp:19
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    Cited by:

    1. Surugiu, Marius-Răzvan & Surugiu, Camelia, 2010. "Comparative structural approaches regarding relevant indicators of Input-Output analysis at macro and sectoral level: a case study of some European Union countries," MPRA Paper 23772, University Library of Munich, Germany, revised 25 Oct 2010.
    2. Fujii Gambero, Gerardo & Cervantes M., Rosario & Fabián Rojas, Ana Sofía, 2016. "The labour content of Mexican manufactures, 2008 and 2012," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    More about this item

    Keywords

    input-output analysis; international trade; employment;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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