Is Employment Globalizing?

44 Pages Posted: 22 Feb 2019

See all articles by Liming Chen

Liming Chen

Nankai University

Jesus Felipe

Asian Development Bank

Andrew Jia Yi Kam

National University of Malaysia (UKM) - Institute of Malaysian and International Studies

Aashish Mehta

University of California, Santa Barbara (UCSB)

Date Written: September 7, 2018

Abstract

We investigate the claim that national labor markets have become more globally interconnected in recent decades. We do so by deriving estimates over time of three different notions of interconnection: (i) the share of labor demand that is export induced (i.e., all labor demand created by foreign entities buying products exported by the home country)—we provide estimates for 40 countries; (ii) the share of workers employed in sectors producing tradable goods or services—68 countries; and (iii) the ratio of the number of jobs that are either located in a tradable sector, or that are involved in producing services that are required by these tradable sectors, to all jobs in the economy, which we call the trade-linked employment share—40 countries. Our estimates lead to the conclusion that the evidence of a large increase in the interconnections between national labor markets is far weaker than commonly asserted: levels of inter-connectivity, and the direction of changes over time, vary across notions of interconnection and countries. The main reasons for this are labor-displacing productivity growth in tradable sectors of each economy and the diminishing fraction of national labor forces hired into manufacturing jobs worldwide. We also discuss the implications of our results for different policy debates that each of the three measures is associated with: international coordination of macroeconomic policies (export-induced labor demand), currency devaluations (share of workers producing tradables), and education and labor protection (trade-linked share).

Keywords: employment, export induced, globalization, tradable goods, trade-linked employment

JEL Classification: F60, F63, F66, F68

Suggested Citation

Chen, Liming and Felipe, Jesus and Kam, Andrew Jia Yi and Mehta, Aashish Sunil, Is Employment Globalizing? (September 7, 2018). Asian Development Bank Economics Working Paper Series No. 556 (September, 2018). Available at SSRN: https://ssrn.com/abstract=3339118 or http://dx.doi.org/10.2139/ssrn.3339118

Liming Chen

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Jesus Felipe (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Andrew Jia Yi Kam

National University of Malaysia (UKM) - Institute of Malaysian and International Studies ( email )

UKM Bangi
Selangor
Bangi, 43600
Malaysia

Aashish Sunil Mehta

University of California, Santa Barbara (UCSB) ( email )

Santa Barbara, CA 93106
United States

HOME PAGE: http://www.global.ucsb.edu/people/aashish-mehta

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