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Exporting and labour demand: Micro‐level evidence from Germany

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  • Andreas Lichter
  • Andreas Peichl
  • Sebastian Siegloch

Abstract

It is widely believed that globalization increases the extent of employment and wage responses to economic shocks. In this paper, we investigate the effect of firms’ exporting activities on the wage elasticity of labour demand. Using rich, administrative linked employer–employee panel data from Germany and destination‐specific industry‐level information on trade flows, we explicitly control for self‐selection into exporting and endogeneity concerns. Overall, we find that exporting has a significant positive effect on the (absolute value of the) unconditional wage elasticity of labour demand. In line with our hypothesis, we further show that the effect is particularly strong for those plants that export a significant share of their output to low‐ and medium‐income countries, hence face relatively more price‐elastic product demand. Exportations et demande de travail: résultats au niveau micro‐économiques pour l’Allemagne. On croît généralement que la globalisation accroît l’ampleur de la réaction des salaires et de l’emploi aux chocs économiques. Dans ce mémoire, on enquête sur l’effet des activités d’exportation des firmes sur l’élasticité de la demande de travail par rapport aux salaires. À l’aide de riches données de panel administratives pour l’Allemagne qui connectent employeurs et employés, et de renseignements sur les flux de commerce international au niveau industriel précisant les destinations, on contrôle explicitement pour les problèmes d’auto‐sélection dans les exportations et d’endogénéité. En général, on découvre que les activités ont un effet positif et significatif sur la valeur absolue de l’élasticité inconditionnelle de la demande de travail par rapport aux salaires. En relation avec notre hypothèse, on montre que l’effet est particulièrement fort pour les établissements qui exportent une portion significative de leur produit vers des pays à faibles ou moyens revenus, et donc font face à une demande pour leur produit qui est plus élastique par rapport au prix.

Suggested Citation

  • Andreas Lichter & Andreas Peichl & Sebastian Siegloch, 2017. "Exporting and labour demand: Micro‐level evidence from Germany," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(4), pages 1161-1189, November.
    • Handle: RePEc:wly:canjec:v:50:y:2017:i:4:p:1161-1189
    DOI: 10.1111/caje.12290
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    Cited by:

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    2. Carbonnier, Clément & Malgouyres, Clément & Py, Loriane & Urvoy, Camille, 2022. "Who benefits from tax incentives? The heterogeneous wage incidence of a tax credit," Journal of Public Economics, Elsevier, vol. 206(C).
    3. Carlo Perroni & Davide Suverato, 2023. "Skills scarcity and export intensity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 719-757, May.
    4. Nazier, Hanan, 2020. "Female labor in Egyptian manufacturing sector: The demand side story," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 1-11.
    5. Marin, Giovanni & Vona, Francesco, 2021. "The impact of energy prices on socioeconomic and environmental performance: Evidence from French manufacturing establishments, 1997–2015," European Economic Review, Elsevier, vol. 135(C).
    6. Andreas Peichl & Martin Popp, 2022. "Can the Labor Demand Curve Explain Job Polarization?," CESifo Working Paper Series 9799, CESifo.
    7. Brändle, Tobias & Kalweit, René, 2016. "The Employment Effects of the EU Eastern Enlargement in Germany," VfS Annual Conference 2016 (Augsburg): Demographic Change 145502, Verein für Socialpolitik / German Economic Association.
    8. Lindenthal, Volker, 2018. "The Volatility and Cyclicality of Job Flows in German Exporters and Non-Exporters," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181637, Verein für Socialpolitik / German Economic Association.
    9. Cox, Michael & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2014. "Labor demand effects of rising electricity prices: Evidence for Germany," Energy Policy, Elsevier, vol. 75(C), pages 266-277.
    10. Yang Liang, 2021. "Job creation and job destruction: The effect of trade shocks on U.S. manufacturing employment," The World Economy, Wiley Blackwell, vol. 44(10), pages 2909-2949, October.
    11. Hanan Nazier, 2019. "Estimating Labor Demand Elasticities and Elasticities of Substitution in Egyptian Manufacturing Sector: A Firm-Level Static Analysis," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(4), pages 549-575, December.
    12. Arnd Kölling & Antje Mertens, 2022. "Export activities and the demand for skills in German businesses," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(1), pages 189-223, February.

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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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