Trade and Manufacturing Jobs in Germany

Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens

Trade and Manufacturing Jobs in Germany

CEPR Discussion Paper No. DP11791

15 Pages Posted: 23 Jan 2017

See all articles by Wolfgang Dauth

Sebastian Findeisen

University of Zurich; IZA Institute of Labor Economics

Heinrich-Heine-University Duesseldorf, Duesseldorf Institute for Competition Economics (DICE); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Institute for the Study of Labor (IZA)

There are 2 versions of this paper

Date Written: January 2017

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.

Keywords: labor markets, Manufacturing, structural transformation, Trade

JEL Classification: F16, J21, R11

Suggested Citation: Suggested Citation

Dauth, Wolfgang and Findeisen, Sebastian and Südekum, Jens, Trade and Manufacturing Jobs in Germany (January 2017). CEPR Discussion Paper No. DP11791. Available at SSRN: https://ssrn.com/abstract=2904312