Total Manufacturing Employment Research Articles

Will advancement in technologies bring fear and damage human employment? Evidence from China's manufacturing industry.

Advancement in technologies such as robotic industries and artificial intelligence bring fear among human being that jobs will be substituted by robots. Base on the panel data of 28 China's manufacturing industries, this research analyzed the impact of technical progress bias on employment. First, we calculate the technical progress bias index of 28 industries base on the stochastic frontier model with transcendental logarithm function found 16 industries were toward the skilled labor while the remaining 12 industries were toward the unskilled labor. Second, the empirical results show that technical progress bias has a positive impact on the total manufacturing employment and significant positive effect on the unskilled labor, while no significant impact on skilled labor employment. Third, the threshold effect test proves that if taking industry value-added per capita or R&D capital stock as threshold variable, the threshold about the impact exist, making the impact on skilled labor was insignificant.

The impact of Chinese import competition on Italian manufacturing

AbstractThis paper documents the effects of increased import competition from China on the Italian labor market. In line with recent studies, we take two complementary approaches and study both the effects on local labor markets and on manufacturing workers. Our analysis shows that the Italian local labor markets which were more exposed to Chinese trade by means 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 toward the non‐tradable sector, in other areas with better job opportunities.

The impact of right-to-work legislation on foreign manufacturing employment in the United States

ABSTRACT This study investigates the impact of right-to-work (RTW) policy on the growth of manufacturing employment in the United States. Of particular theoretical interest is the impact of RTW law intervention on manufacturing employment by foreign investors, compared to changes in the general patterns of manufacturing employment. Using the U.S. Census Bureau’s County Business Patterns data and the Bureau of Economic Analysis’s Foreign Direct Investment in the U.S. data, we compare changes in the number of total and foreign manufacturing jobs in Indiana, Kentucky, Michigan, West Virginia, and Wisconsin, five states that recently passed RTW legislation, with those in non-RTW regions. Results show that new RTW regions experience more growth in total manufacturing employment than non-RTW regions. In addition, foreign manufacturing employment also grows larger in new RTW regions than in non-RTW regions and to a greater extent than domestic manufacturing employment. We attribute these findings to foreign firms’ efficiency-based goal orientation and their footloose-ness.

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.

Determinants of Manufacturing Employment in the Mexican States, 2004–2017

AbstractThe aim of this paper is to investigate the effects of production and real wages on employment in the manufacturing sector spanning the 32 Mexican states from 2004 to 2017. This analysis is carried out by estimating spatial Durbin panel data models, which can capture heterogeneous performance across states and over time, for the growth rates of total formal manufacturing employment and its two components, permanent and temporary employment. Our results suggest that although the negative direct effects of real wage growth are relevant to the explanation of temporary employment growth, the total effect of production growth can be considered the main determinant of total employment, including both temporary and permanent employment dynamics. The estimated coefficients, however, show a rather small effect. A major policy implication of this is that central and state governments should pursue policies that enhance production growth in order to increase employment in this sector.

The Impact of International Trade on Manufacturing Employment in Australia: Evidence From the China Shock

We examine how the rapid growth in imports of manufactured goods from China affected industry-level employment in Australia from 1991 to 2006. Our analysis incorporates both the direct effect from increased import competition, and indirect spill-over effects from input-output linkages. We estimate that growth in imports from China caused a loss in total manufacturing employment of between 89,900 and 209,800 workers – accounting for 8.5 to 19.8 per cent of manufacturing employment in 1991. Such an effect seems best described as sizable, but not one that by itself spelled the end of manufacturing industry in Australia. The largest impacts from growth in Chinese imports are found for manufacturing industries most exposed to import competition; and for the sub-period from 2001 to 2006.

Cost relationships and globalization in the Australian clothing industry

ABSTRACTAustralia developed a substantial clothing industry with protectionist international trade policies, including prohibitively high tariffs, quotas, and subsidies. The industry became an important source of jobs, with over 6.5 per cent of total manufacturing employment at the close of the 1960s. As Australia has moved towards freer trade, employment in clothing production has fallen substantially. The question of whether the clothing industry can remain viable in its new environment became an important issue. Here, we examine two crucial economic considerations relating to that question: economies of scale and relations (substitute/complementary) between the various inputs, both domestic and outsourced foreign. The findings strongly indicate the presence of economies of scale and that the industry has reduced its unit costs over the period of study. The results also suggest that most of the inputs are substitutes for one another, although only the estimated cross price elasticities between capital and labour are highly statistically significant in both models utilized in the study. To be successful in the future, the Australian clothing industry will likely need to find market niches where it can offer superior products and/or service as well as further reduce its unit costs.

Feminization, Defeminization, and Structural Change in Manufacturing

The paper uses accounting decomposition methods to analyze changes in female shares of manufacturing employment for 36 countries at different levels of development from 1981 to 2008, for the manufacturing sector as a whole and within a group of labor-intensive manufacturing industries for selected countries. For the majority of countries, feminizing and defeminizing, labor-intensive industries contributed most to changes in female shares of total manufacturing employment and within-industry effects were more important than employment reallocation effects. Within labor-intensive industries, textiles, and apparel were the largest drivers of changes in female shares of employment and technological upgrading was associated with defeminization.

The Impact of Globalization and Technology Transfer on Manufacturing Employment and Skills in Ethiopia

There is a dearth of research on the impact of technological change on employment in the context of least developed countries (LDCs) embarking on globalization, which enhances the prospect of direct technological imports or embodied technological transfer. Using a sample of 1,940 enterprises from Ethiopia over the period 1996-2004 and deploying System Generalized Method of Moments (GMM-SYS), this paper attempts to establish the nature of manufacturing employment in Ethiopia and the role played by trade and FDI in determining employment. The empirical results obtained lend support to globalization having a labour-augmenting effect, increasing total manufacturing employment. The two-equation dynamic framework implemented to analyse enterprise-level employment trends by skill level provides some evidence of skill-bias specific to enterprises with higher share of foreign ownership and those that that are located in the vicinity of the capital city. Exporters are not found to benefit from learning by exporting.

Subcontracting and the Size and Composition of the Informal Sector: Evidence from Indian Manufacturing

This paper analyzes the relationship between formal sector subcontracting and the evolution of the informal sector using nationally representative survey data of Indian manufacturing enterprises for the period 1995-2006. In these years of fast economic growth, subcontracting by formal enterprises gained importance, while the informal sector continued to account for 90 percent of total manufacturing employment. In order to contrast between a 'modernization' and a 'stagnation' view on formal-informal production linkages, we test whether subcontracting is related to the size of more modern versus more traditional segments of the informal sector. The results show that formal sector subcontracting is positively related to the size of the informal sector only for the most modern informal activities, supporting the view that subcontracting is related to informal sector modernization. We find no support for the claim that the continued expansion of very traditional informal activities is related to increased outsourcing by formal manufacturing enterprises.

Wage-based evidence of returns to external scale in China’s manufacturing: a spatial analysis

Wage-based evidence of returns to external scale in China’s manufacturing in 2004 is assessed using county-level units of observation. Two models are used: one with population and percent manufacturing employment as measures of urbanization and localization, respectively, and the other with population density and total manufacturing employment. Global results estimated from spatial error models and local results from geographically weighted regressions indicate that urbanization economies of scale, measured in terms of population but not population density, and localization economies of scale, measured in terms of percent of employment in manufacturing or total manufacturing employment, are apparent—but only when internal scale of production is not included as an explanatory factor in the models. Economies of scale are still outcomes of the models, but only when the urbanization, localization, and internal scale factors are considered in combination. The results not only illustrate particular characteristics with respect to recent returns in China’s manufacturing, they are also interesting with respect to schools of thought concerning increasing returns as externality effects.

The relevance and prospects of advancing tobacco control in Indonesia

Using published data about consumption, economic aspects, and legislation, this paper analyzes tobacco control in Indonesia, a major consumer and producer of tobacco products. Given its large population and smoking prevalence, Indonesia ranks fifth among countries with the highest tobacco consumption globally. Over 62% of Indonesian adult males smoke regularly, contributing to a growing burden of non-communicable diseases and enormous demands on the health care system. Tobacco control policies, however, have remained low on the political and public health agenda for many years. One reason was the contribution of tobacco to government revenues and employment, particularly in the industrial sector. But tobacco's importance in employment has fallen significantly since the 1970s from 38% of total manufacturing employment compared with 5.6% today. Widespread use of tobacco since the 1970s and the concomitant burden of non-communicable diseases have given rise to a more balanced view of the costs and benefits of tobacco production over the last decade. The first tobacco control regulation passed in 1999, succeeded by amendments in 2000 and 2003. Today, few restrictions exist on tobacco industry conduct, advertising, and promotion in Indonesia. We examine the relevance and prospects of advancing in Indonesia four cost-effective tobacco control strategies: price and tax measures, advertising bans, clean air legislation, and public education. We conclude with several suggestions for action for the public health community.

Product Market Volatility and the Adjustment of Earnings to Risk

This investigation of compensating wage differentials uses an instrument for the risk of unemployment, namely, the industry‐specific shipment volatility, to address some empirical anomalies found in the literature. I find that risk premiums for the risk of unemployment range from 8.5 to 19 percent when the covariance between shipment volatility and total manufacturing employment is taken into account. Covariance risk requires positive premiums that range from 1.4 to 14 percent depending on the specification.

WTO and the Textile and Garment Sector: Implications for Sri Lanka

The garment industry in Sri Lanka remains the largest gross export earner, accounting for a significant share of total manufacturing employment in the country. With the expected phase out of quotas under the Multi Fibre Agreement in 2005, the industry will face significant challenges from an increasingly competitive international market. The paper evaluates the performance of the Sri Lankan garment industry to identify the threats and opportunities that lie ahead as the MFA is progressively phased out over the coming years.

Activity based costing in small and medium enterprises

The role of Small and Medium Enterprises (SMEs) in a national economy has been emphasized all over the world considering their contribution to the total manufacturing output and employment opportunities. Also, SMEs are flexible and innovative taking into account the size and business structure. Hence, there is a potential to improve the overall performance of SMEs and hence their competitiveness. Activity Based Costing (ABC) is gaining its importance in organisations which are aiming for a major share in business by improving productivity and quality. However, ABC has received little attention from SMEs inspite of the fact that it has an important role to play in improving the competitiveness of SMEs. Firstly, this paper reviews the cost management practices in SMEs. Secondly, a framework has been developed in this paper for the implementation of ABC in SMEs. Finally, some future research directions are indicated in the area of ABC in SMEs.

SOURCES OF OUTPUT GROWTH IN BANGLADESH FOOD PROCESSING INDUSTRIES: A DECOMPOSITION ANALYSIS

USTAINED growth of firms requires consistent improvement in their productivity. Within the industrial sector, the growth of the food processing industry is particularly important for Bangladesh as this is one of the major industries in terms of contribution to total manufacturing production and employment. For example, it ranks second only to textiles in terms of the value of output and employment, accounting for 25 per cent of total industrial output and 16 per cent of total manufacturing employment in 1990/91 (BBS 1995). Empirical studies (Little, Scitovosky, and Scott 1970; Steel 1972; Rahman 1983) carried out in Bangladesh and elsewhere have shown that manufacturing firms had operated with a high degree of unrealized productive capacity due to the excessive controls of the protective regimes in the 1960s and 1970s. It is expected that recent liberalization programs will encourage firms to improve productivity growth. Bangladesh can no longer afford to hold unrealized capacity and recent reforms have put an emphasis on productivity gains rather than, as in past, the injection of new inputs into the production process. Studies examining the extent of capacity realization and the overall productivity performance of firms in the food processing industry are limited in Bangladesh. The Bangladesh-Canada Agriculture Sector Team (1991) estimated a capacity utilization index using firm-level data from the food processing sector of Bangladesh. This study revealed that capacity utilization ranged from 16 per cent to 56 per cent across firms. Another study in the food processing sector conducted by the International Labour Organization (ILO) (1991) found that 70 per cent of the enterprises realized less than 50 per cent of their productive capacity; another 20 per cent realized 51 to 60 per cent and only 10 per cent realized 61 to 80 per cent of their production capacity. Several studies undertaken by the Harvard Institute for Inter-

Implications of Computer-Integrated Manufacturing in Small and Medium Enterprises: An Empirical Investigation

In this paper, an attempt has been made to discuss the implications of computer-integrated manufacturing (CIM) in small and medium enterprises (SMEs) with the help of empirical research. The role of SMEs in a national economy has been emphasised all over the world, considering their contribution to the total manufacturing output and employment opportunities. SMEs are flexible and innovative, taking into account the size and business structure. Hence, there is potential to improve the overall performance of SMEs and their competitiveness. The physically distributed manufacturing environment of large-scale manufacturing industries emphasises the importance of SMEs. CIM has been successful in large-scale industries for improving productivity and quality, and hence competitiveness of manufacturing. However. CIM has received little attention from SMEs although it has an important role to play in improving the competitiveness of SMEs in a global market. Realising the potential of CIM in SMEs. an attempt has been made in this paper to study the potential of CIM with the help of a suitable model and an empirical analysis.

Clustering of small agro-processing firms in Indonesia

Small-scale industries in Indonesia provide more than 65% of total manufacturing employment. Sixty-three percent of small-scale firm employment is in firms that are clustered. A cluster is defined statistically in Indonesia as at least 20 firms in a village. For some agro-processing industries, such as bamboo plaiting, clustering does not involve interaction among firms; for others, notably the furniture industry, clustering firms make joint marketing efforts, subcontract each other, and share large orders. This article uses two recent case studies in the agro-processing sector—the furniture and the palm sugar industries—in Central Java. We argue that the target market of the industry (local or international) influences the nature of the contracts and other forms of interaction in the clusters. Targeting an international market requires formal contracts, more focus on marketing, and separate roles for finishing firms and subcontracting firms. Policy should be directed at enabling clusters to shift to the international market by improving contract enforcement regulations, vocational training, and providing opportunities for group lending.

Market power, firm performance and real wage growth in Zimbabwean manufacturing

This paper uses a two year panel of data on 600 Zimbabwean manufacturing workers and the employers to examine several aspects of the labor market response to the reforms introduced in the 1991 structural adjustment program. The analysis then uses this evidence to explore a number of hypotheses about the functioning of formal urban labor markets in Zimbabwe, with particular attention to the issue of rent sharing. First, as one would expect, liberalization of trade did indeed act to shift employment from import competing sectors to export sectors, although total manufacturing employment was basically unchanged. Second, real wages in manufacturing fell for most workers. Third, the pattern of wage changes across sectors and firms is consistent with a view of labor markets as noncompetitive. The evidence provides support for the idea that a rent-sharing process of wage determination, rather than one based on efficiency wages or government intervention, is an appropriate characterization of this labor market.

Manufacturing branch plants as sources of new job creation: Evidence from Devon and Cornwall

This paper examines the job creation impacts of incoming branch factory establishment in Devon and Cornwall. It is based on an examination of the scale of direct employment created by the population of in-moving branch units, together with a more detailed analysis of their motives for investment, the quality of employment generated and the extent to which additional dependent employment has been created through linkage and local income effects. Incoming branch units are found to have accounted directly for some 22,860 surviving jobs in 1990, or just over one quarter of total manufacturing employment in the region. Regional policy has played a central role in their attraction. While local purchasing is not high, after accounting for linkage and local income effects it is estimated that incoming branch units account for approximately 7% of total employment in Devon and Cornwall, and 31% of the region's manufacturing employment. The issue of employment quality is also examined. There is little evidence of generalised low skill levels, while evidence on branch plant growth rates and longer term evidence on the overall size of the branch plant sector reveals considerable dynamism during recent years.