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Empirical Research on Trade and Employment Adjustment of Manufacturing Industry in China

Author: LiXing
Tutor: GuanLong
School: Harbin Institute of Technology
Course: International Trade
Keywords: Trading Employment Manufacturing The output effect Substitution effect
CLC: F752;F249.21
Type: Master's thesis
Year: 2011
Downloads: 76
Quote: 0
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Abstract


The increase in labor employment is the main target of steady economic and social development of a country, many theories and practice has shown that the existence of the inextricable link between foreign trade and employment. Foreign trade in the past three decades, China's economic and social development has made a huge contribution, at the same time, it has also become a major force to maintain and promote the steady growth of employment in China. Manufacturing industry as a major export industry for our country in recent years a significant increase in jobs, absorb many idle labor. Therefore, the manufacturing sector as the main object of study in-depth analysis of the link between China's foreign trade and employment, to explore trade promotion mechanism of action and effect of employment on an effective solution to the employment problem in China with the theoretical and practical significance. To understand the relationship between foreign trade and employment, you first need to start from the mechanism of the impact of foreign trade on the labor market, to analyze how foreign trade affects the demand for labor by both output and substitution effects. The output effect of trade liberalization will increase the demand for the final product of the domestic industry, thereby increasing the demand for labor. The substitution effect is the increase of foreign trade will allow domestic producers to obtain a wider range of factors of production to save production costs, and external factors of production can substitute their own labor elements, which means that the increase in the elasticity of substitution of factors of production will enable the industry labor demand elasticity rise. Then combined with practical experience of China's reform and opening up and after accession to the WTO organization to explain the foreign trade in China's export product structure and employment structure changes. After the use of the method of data analysis and econometric model estimation method of combining the analysis of changes in the pattern of our long-term employment trends, and 2005-2008 manufacturing sub-distribution of the fine-industry employment situation and its determinants. Finally, the results presented conclusions and tentative policy recommendations. Through theoretical and empirical research, can be drawn: first, under the existing pattern of trade, the development of foreign trade in stable employment growth clearly has positive welfare implications. Second, foreign trade affect employment remains an output and substitution effects. Econometric model estimates the output elasticity of employment of wage flexibility are respectively 0.56 and -0.5, that is, for every 1% increase in output and wages, and employment will be a corresponding increase of 0.56% and a decrease of 0.5%. Third, foreign trade easily affected by external shocks feature determines China's manufacturing industry as well as the overall employment prone to short-term fluctuations and the impact of the phenomenon. Future, through appropriate adjustments to trade policy to promote the transformation of the mode of economic development and employment structure adjustment, will be the focus of solving the employment problem in China. Therefore, continue to expand exports, and has an important role in promoting the proper control of wage growth on employment.

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CLC: > Economic > Economic planning and management > Labor Economics > Countries in the world of labor economic profile > China > Labor force
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