Manufacturing Employment Research Articles

The Impact of Chinese Import Competition on Italian Manufactoring

This paper documents the effects of increased import competition from China on the Italian labour market. In line with recent studies (Autor et al., 2013, 2014), we take two complementary approaches and study the effects on both local labour markets and manufacturing workers. Our analysis shows that Italy’s local labour markets, which were more exposed to Chinese trade because of their industry composition, ended up suffering larger manufacturing and overall employment losses. Nevertheless, back-of-the-envelope calculations suggest that the aggregate effect on total manufacturing employment is modest. At the individual level, contrary to what has been documented for many developed countries, workers initially employed in more exposed manufacturing industries did not suffer long-term losses in terms of lower earnings or more discontinuous careers. While they were indeed less likely than other similar workers to continue working in manufacturing, they were also able to carry out successful transitions towards the non-tradable sector, in other areas with better job opportunities.

Impact of Mergers and Acquisitions on Unemployment: A Case of Indian Economy

The mergers and acquisitions approval is focused on the product market mainly, but recently input market has also been considered in different jurisdictions. The study’s focal point was evaluating the impact of mergers and acquisitions on the unemployment rate in India. The secondary data was collected from CMIE. Data was collected on employment and mergers in manufacturing, service, mining, and real estate and construction industries from March 2016 to September 2020 quarterly for correlation analysis. Regression analysis was also conducted where the unemployment rate in India was dependent variable and number of acquisitions, value of acquisition, number of mergers, CPI, IIP, BSE Sensex trading volume, trade balance, central government expenditure were independent variables, where data was collected from January 2016 to November 2020 on monthly basis. The result indicated a negative and weak correlation between the mining and service industries mergers with the number of employees in the industries and positive yet weak correlation between manufacturing industry and real estate and construction industry mergers with the employment in the industry, but these results were insignificant. Regression analysis result deduced that number of acquisition, inflation, and trade balance had a positive yet insignificant impact on the unemployment rate in India, and acquisition value, number of mergers, IIP, BSE Sensex Trading volume, trade balance, and central government expenditure had a negative impact on the unemployment rate in India but insignificant, except IIP. Results indicate that volume of transactions and number of mergers and acquisitions had a distinctive impact on the unemployment level and industry specific research is required for the identification of oligopoly and oligopsony.

Effects of Automation on the Gender Pay Gap: the case of Estonia

This paper investigates how investments in automation-intensive goods affects the gender pay gap. The evidence on the effects of automation on the labour market is growing; however, little is known about the implications of automation for the gender pay gap. The data used in the paper are from a matched employer-employee dataset incorporating detailed information on firms, their imports, and employee-level data for Estonian manufacturing and services employers for 2006–2018. We define automation using the imports of intermediates embedding automation technologies. The effect of automation is estimated using simple Mincerian wage equations and the causality of the effect is validated using propensity score matching. We find that introducing automation enlarges the gender pay gap. The negative effect of importing automation-intensive goods for female employees is about two to four percentage points larger than for male employees. The propensity score matching confirms that the introduction of automation has a higher causal effect on the wages of male employees than female employees.

Labor Unions and the Electoral Consequences of Trade Liberalization

We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left’s identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature.

The Role of a University in Cluster Formation: Evidence from a National Institute of Science and Technology in Korea

Can a new technology-oriented research university start a virtuous cycle by inducing industrial agglomeration? In this paper, I study the effect of the opening of the Ulsan National Institute of Science and Technology (UNIST) in 2009 on local industrial specialization. Using synthetic control, I find that the opening of the university increased manufacturing employment through the entry of new firms between 2009 and 2016. These new firms were mainly found in industries technologically close to the university’s research. The number of firms in closely connected industries increased more than 30% compared with little change in less-related industries. My results suggest that a university can lead to local industrial specialization toward industries more closely related to that university’s innovative strengths.

Right-to-Work Laws as Economic Freedom: Their Role in Influencing the Geographic Pattern of Manufacturing Jobs, Incomes, and Finances

A large empirical literature has found positive effects from economic freedom on economic outcomes, such as output and per capita economic growth. This study seeks to explain empirically the disparate timing of state manufacturing earnings and employment decline, as well as the shift among states in both manufacturing earnings and manufacturing employment resulting from right-to-work laws, which can be viewed as reflecting labor market freedom and thereby acting as a de facto economic policy. The results of the empirical estimations suggest a marked geographic shift of manufacturing employment and compensation in the U.S. during the 1970 to 2012 time period. The empirical estimations indicate that the regions of the country that have historically represented the manufacturing base have suffered the greatest relative losses in both employment and compensation during this period. In addition to regional location, it appears that right-to-work laws have had the effect of leveling manufacturing employment and compensation levels across the states since 1970. The data analysis suggests that, at least in part due to right-to-work laws, the manufacturing sectors of the states and regions are becoming increasingly similar over time, i.e., manufacturing activity that was once highly concentrated in the Great Lakes, Northeast, and Mideast has now converged significantly, with the outcome that there is little geographic difference in concentration among the eight BEA regions.

Macroeconomic impacts of cigarette consumption in Pakistan

BackgroundPakistan has a large population of tobacco users, with about 24 million adults consuming tobacco products in one form or another. There is a dearth of research on the impact...

‘We Have Voices But We Can’t Really Speak’: transnational privatisation and (de)juridification of women’s employment in global export manufacturing—a case study of Hansae Vietnam Co Ltd

ABSTRACT This paper explores the transnational regulatory structures governing the experiences of women workers in a garment export manufacturing complex in Ho Chi Minh City, Vietnam. It addresses their resistance to abuse outside the formal legal regimes of audits, grievances, and legal challenges. It then traces their experiences through the transnational regulatory framework which structures their work, as a means of testing the theorisation of emerging transnational legal models. In particular, the article will discuss the interactions of Vietnamese domestic law, international law, and private regulation by the factory owners and Nike, a prominent buyer, with respect to the specific placement of women in garment export manufacturing and their capacity to organise and gain legal relief. It concludes by stating that the privatisation of regulatory forms and procedures underway in the development of the transnational legal order significantly erodes workers’ legal rights and claim-making capacities, but countercurrents of grassroots resistance are also identifiable.

An econometric analysis of the regional industrial specialization: The Russian manufacturing industry case study

Subject. The article reviews the manufacturing industry in Russian regions, calculates the indicators of regional industrial specialization needed for development of econometric models of spatial panel data. Objectives. The purpose is to create a methodology for analyzing the regional industrial specialization based on econometric tools; to test it, using the case of the manufacturing industry, for determining the type of externalities in the Russian Federation. Methods. To build econometric models, we use methods of least squares and maximum likelihood. We apply localization ratios to assess regional industrial specialization in terms of the volume of employment, revenue and investment in manufacturing, workforce productivity, etc. Results. The findings show the clustering of regions by the level of productivity. The localization of manufacturing industry in regions in terms of localization of employment and localization of productivity is negatively related to productivity in the region. This can be explained by the transition of regional economies to the post-industrial mode, where the service sector becomes more important, and by possible over-industrialization and specialization of certain regions in the context of the need to develop related sectors and to build links between them. The presence of direct negative MAR externalities may indicate a need for further research in positive Porter and Jacobs externalities for Russian regions manufacturing industry. Conclusions. The developed methodology enables to identify and analyze relationships between regional industrial specialization and regional indicators; to specify the type of externalities and determine the existence of indirect and direct effects of industry localization.

Macroeconomic dynamics and the evolution of formal manufacturing employment (2003–2016)

This study aims to analyse the evolution of the formal employment in the sub-sectors of the manufacturing industry between 2003 and 2016. The period has been divided into three according to the moment of economic cycle: the moment of greatest GDP growth between 2003 and 2008 (i), going through the economic slowdown period, between 2008 and 2013 (ii), until the phase of strong setback between 2013 and 2016 (iii). There was an intense growth of formal employment in the Brazilian economy between 2003 and 2013, greater than GDP growth. This performance showed very favorable rates until 2008 and then cooled down, but the indicators of formal employment, despite the slowdown in growth rate, this period showed employment rates well beyond the evolution of GDP. After 2013, this scenario has reversed strongly, both GDP and formal employment indicators showed negative results. The manufacturing industry, has demonstrated, since then, significant reduction of added-value goods and employment levels. The article questions the great difficulty of the Brazilian economy to sustain higher rates of GDP in times of worsening of the international scenario, especially in relation to industrial GDP and industrial employment.

Employment data show strong, growing nonprofit sector in U.S.

The most recent analysis of the state of employment in the philanthropic sector shows that—at least prior to COVID‐19—the nation's nonprofits continue to represent a large and growing segment of the overall U.S. private employment picture. In their analysis of their collected data, the researchers at the Johns Hopkins Center for Civil Society Studies found that in 2017, U.S. nonprofits, as a sector of the economy, remained the third largest employer in the U.S., behind only retail trade, and the accommodations and food services industry. In fact, they found that employment by nonprofits overtook employment in manufacturing by nearly 100,000 workers nationwide in 2017, an important milestone as manufacturing is perceived as a sort of bellwether for the health and vitality of the broader economy. Thus, with nonprofit employment eclipsing that of manufacturing, it signifies a robust and healthy employment environment for the sector.

Gross Employment Effects in the Renewable Energy Industry in Germany—An Input–Output Analysis from 2000 to 2018

The purpose of this paper is to provide detailed insights into an approach to measure gross employment of the renewable energy (RES) industry in Germany in order to improve transparency and comparability. The method applied for the assessment of gross employment figures follows the input–output (IO) modeling approach and covers direct as well as indirect employment effects. All-in-all, four different approaches of applying the IO-methodology are described. The analysis includes 11 different RES technologies. It provides information on employment in manufacturing and installation, operation and maintenance (O&M), as well as the provision of biogenic fuels. The results show the relevance of the manufacturing and installation sector as well as the influence of foreign trade on this sector. On the other hand, it reveals the growing importance of O&M as well as the provision of biogenic fuels and their role in providing a more stable development of employment in the RES industry. Our main methodological conclusions are as follows: (1) data availability is a major challenge in assessing employment effects of specific technologies; (2) there are many different ways to apply the IO-modeling approach to specific technologies and services; (3) the transfer of results to other countries is limited.

Make or Buy: Offshoring of Services Functions in Manufacturing

About 40% of employment in manufacturing is in services functions. This paper develops a measure of narrow outsourcing: the matching of services functions that are performed by workers who are inside manufacturing firms to the same services functions that are provided by outside suppliers. Narrow outsourcing is entered into labour demand functions where labour is classified by business functions. The impact of narrow offshoring on manufacturing labour demand is small on average but depends strongly on the complexity of the value chain, the policy environment, and ICT maturity. The IT and R&D functions are most sensitive to offshoring.

Services Input Intensity and US Manufacturing Employment Responses to the China Shock

We present industry-level evidence that manufacturing sectors that make use of services as inputs more intensively are more robust to shocks from import competition. Specifically, the negative effect of the China shock on US manufacturing employment is lower for industries with high services input intensity. Furthermore, our analysis reveals significant heterogeneity in the impact of different types of services, which points towards a fruitful research agenda on the role of services as a determinant of firm competitiveness.

Variation in the Heartland: Explaining the Use of Economic Development Incentives in Three Great Lakes States

We identify the factors correlated with the use of economic development incentives after the Great Recession of 2007–2009 to determine the presence of entrepreneurial development regimes. We utilize a unique dataset that combines information on incentives (tax increment financing districts and selected tax abatements and business assistance) with economic, fiscal, and political characteristics for all municipalities in the largest Metropolitan Statistical Areas of Illinois, Wisconsin, and Michigan. These three states bordering Lake Michigan share similar histories and settings, thus targeting the research focus on the key attributes of interest. Our empirical results demonstrate substantial dissimilarity between incentive types and across states, most likely due to policy structures and reforms at the state level that encourage different municipal development regimes. Whereas municipalities, particularly larger ones, continue to use tax abatements, exemptions, and credits to pursue employment growth, the municipalities gravitating toward tax increment financing tend to be suburbs with low unemployment rates and relatively highly educated residents, and not places with greater employment density or manufacturing employment.

Foreign Labour Policy and Employment in Manufacturing: The Case of Malaysia

ABSTRACT The over-dependence of Malaysian manufacturing on unskilled foreign workers suggests the lack of policy alignment with the needs of the labour market. Despite the use of “price restrictions” (foreign worker levy and minimum wage) to control the demand for foreign labour, there are few indications of policy instruments having influenced the foreign employment growth rate. This article estimates industry-level foreign employment, paying attention to the roles of levy system, recruitment system and minimum wage policy, to provide a perspective on labour market administration. Using a panel data set of manufacturing industries for 1985–2014, upward revisions in the levy over the 1990s were found to be significant deterrents to the growth rates of foreign employment. The increase in levy in 2005 however failed to reduce this growth as it came in direct conflict with the introduction of outsourcing of foreign workers. The article suggests that with better policy co-ordination with supply-side instruments, a levy is a desirable instrument to align immigration with the objective of reducing foreign worker dependency. To appropriately price labour market needs, strict enforcement of levy payments by employers is recommended along with a fine-tuning for the existing levy to make it a multi-tier levy system for Malaysia.

Agricultural policy reforms: Roles of markets and states in China and India

Market reforms have been given much of the credit for China's spectacular growth performance. This paper looks at China's reform process systematically, along with India's, and argues that the Chinese state has played a key role in transforming China into a modern economic state, deploying unlimited supplies of labor and combining it with a variety of initiatives in a pragmatic, nonideological way to promote public and private investment and create productive employment in agricultural, manufacturing, and service sectors. In contrast, India's reforms have been sporadic and are still a work in progress. The record-breaking expansion of China's financial system in fostering investments was initially overlooked, but has attracted considerable attention in recent years. Is China unique, or are lessons from the Chinese experience for public policy and its sequencing transferrable to agricultural and structural transformation in countries lagging behind, including India?

Assessing the Impact of Off-the-Job and On-the-Job Training on Employment Outcomes: A Counterfactual Evaluation of the PIPOL Program

This article studies the effect of PIPOL, an integrated program of active labor policies launched by the Friuli Venezia Giulia, an Italian region, in 2014. To understand the impact of training in a classroom setting (off-the-job) and work-related training (on-the-job) on employment integration of benefit recipients. We adopt a counterfactual approach by comparing a target group (treated) against a control group (19,899) extracted by means of propensity score matching and Mahalanobis distance matching among subjects who, while registered in the program over the years 2014-2016, had never benefited from it. The selection of about 7,175 recipients in the program and in each type of intervention was random. Subjects: About 30,000 job seekers made up of 3,911 interns, 2,945 trainees, and 319 recipients of training and internship within PIPOL. Target: Young people, Not in Education Employment or Trainings, and over 30s. We look at different outcomes: employment tout court and employment in open-ended contracts. The overall net impact of PIPOL was equal to +5 pp on average. Specifically, impact results were classroom training none, internship sizable (+14.1 pp), and training combined with an internship, quite sizable (+9.6 pp). Furthermore, training to gain a qualification was the most effective (+6.4 pp) among those receiving combined training and internship. Internship also increased the chance to find permanent employment (+3 pp). Among recipients, women, immigrants, and low-skilled recipients registered the most sizable impact on finding employment and training in manufacturing and construction was more effective than elsewhere. Italian young people have ever-increasing academic attainment but, due to the sequential nature of the education system, little work-related competences. This could explain the greater success of internships on classroom training.

Impact of Determinants of Industrial Development on Employment and Wages in Indian Manufacturing

ABSTRACT The present study was undertaken to explore the evolution of the impact of firm-level performance on employment level and wages in the Indian organized manufacturing sector over the period 1989-90 to 2013-14. One of the major components of the economic reform package was the deregulation and de-licensing in the Indian organized manufacturing sector. The impact of firm-level performance on employment and wages were estimated for Indian organized manufacturing sector in major sub-sectors in India during the period from 1989-90 to 2013-14 of the various variables namely profitability ratio, total factor productivity change, technical change, technical efficiency, openness (export-import), investment intensity, raw material intensity and FECI in total factor productivity index, technical efficiency, and technical change. The study exhibited that all explanatory variables except profitability ratio and technical change cost had a positive impact on the employment level. Out of eight variables, four variables such as net of foreign equity capital, investment intensity, TFPCH, and technical efficiency change showed a positive impact on wages and salary ratio and rest of the four variables such as openness intensity, technology acquisition index, profitability ratio, and technical change had negative impact on wages and salary ratio. In this context, the profit ratio should be distributed as per the marginal rule of economics such as the marginal productivity of labour and capital.

Trade protectionism and US manufacturing employment

This paper builds a numerical global general equilibrium model to simulate the effects of US-initiated trade protection measures on manufacturing employment. The simulation results show that US trade protection measures reduce manufacturing employment in the US, and these losses will further increase if trade partners take retaliation measures. Although trade protection measures can increase demand for US domestic manufactured goods because of decreased foreign demand, increased consumption prices of manufactured goods will move the demand to services. Trade partners’ retaliation measures will further decrease the demand for US manufactured goods. The whole effect is that the US loses on domestic manufacturing demand and then loses manufacturing employment.