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Trade and manufacturing jobs in Germany

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  • Dauth, Wolfgang
  • Findeisen, Sebastian
  • Südekum, Jens

Abstract

The German economy exhibits rising service and declining manufacturing employment. But this decline is much sharper in import-competing than in export-oriented branches. We first document the individual-level job transitions behind those trends. They are not driven by manufacturing workers who smoothly switch to services. The observed shifts are entirely due to young entrants and returnees from non-employment. We then investigate if rising trade with China and Eastern Europe causally affected those labor flows. Exploiting variation across industries and regions, we find that globalization did not speed up the manufacturing decline in Germany. It even retained those jobs in the economy.

Suggested Citation

  • Dauth, Wolfgang & Findeisen, Sebastian & Südekum, Jens, 2017. "Trade and manufacturing jobs in Germany," DICE Discussion Papers 242, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:242
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    References listed on IDEAS

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    1. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 205-240, October.
    2. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2014. "The Rise Of The East And The Far East: German Labor Markets And Trade Integration," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1643-1675, December.
    3. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    4. Martin Neil Baily & Barry P. Bosworth, 2014. "US Manufacturing: Understanding Its Past and Its Potential Future," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 3-26, Winter.
    5. Christian Dustmann & Bernd Fitzenberger & Uta Sch?nberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 167-188, Winter.
    6. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    7. Dauth, Wolfgang & Findeisen, Sebastian & Südekum, Jens, 2016. "Adjusting to Globalization - Evidence from Worker-Establishment Matches in Germany," Annual Conference 2016 (Augsburg): Demographic Change 145522, Verein für Socialpolitik / German Economic Association.
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    Cited by:

    1. Bamieh, Omar & Fiorini, Matteo & Hoekman, Bernard & Jakubik, Adam, 2017. "Services Input Intensity and US Manufacturing Employment Responses to the China Shock," CEPR Discussion Papers 12173, C.E.P.R. Discussion Papers.
    2. Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens, 2018. "Adjusting to Globalization in Germany," IZA Discussion Papers 11299, Institute of Labor Economics (IZA).
    3. Dauth, Wolfgang & Findeisen, Sebastian & S�dekum, Jens & Woessner, Nicole, 2017. "German Robots - The Impact of Industrial Robots on Workers," CEPR Discussion Papers 12306, C.E.P.R. Discussion Papers.
    4. Anna Goeddeke & Justus Haucap & Annika Herr & Christian Wey, 2018. "Flexibility in Wage Setting Under the Threat of Relocation," LABOUR, CEIS, vol. 32(1), pages 1-22, March.
    5. Banga Karishma, 2019. "Digital technologies and ‘value’ capture in global value chains: Empirical evidence from Indian manufacturing firms," WIDER Working Paper Series wp-2019-43, World Institute for Development Economic Research (UNU-WIDER).
    6. Naudé, Wim & Nagler, Paula, 2017. "Technological Innovation and Inclusive Growth in Germany," IZA Discussion Papers 11194, Institute of Labor Economics (IZA).
    7. Bonnet, Céline & Schain, Jan Philip, 2017. "An empirical analysis of mergers: Efficiency gains and impact on consumer prices," DICE Discussion Papers 244, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. Cabral, Sónia & Martins, Pedro S. & Pereira dos Santos, João & Tavares, Mariana, 2018. "Collateral Damage? Labour Market Effects of Competing with China – at Home and Abroad," IZA Discussion Papers 11790, Institute of Labor Economics (IZA).
    9. Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens & Woessner, Nicole, 2018. "Adjusting to Robots: Worker-Level Evidence," Working Papers 13, Federal Reserve Bank of Minneapolis, Opportunity and Inclusive Growth Institute.
    10. Paul Piveteau & gabriel smagghue, 2018. "The Impact of Chinese Competition along the Quality Ladder," 2018 Meeting Papers 509, Society for Economic Dynamics.
    11. Wim Naudé & Paula Nagler, 2018. "Technological Innovation, Entrepreneurship and Productivity in Germany, 1871-2015," SPRU Working Paper Series 2018-02, SPRU - Science Policy Research Unit, University of Sussex Business School.

    More about this item

    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
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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