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American Economic Review Vol. 107 No. 5 2017

Trade and Manufacturing Jobs in Germany

Wolfgang Dauth1; Sebastian Findeisen2; Jens Suedekum3

1 University of Würzburg and IAB, Sanderring 2, 97070 Würzburg, Germany (e-mail: ) · 2 University of Mannheim, L7, 3-5, 68131 Mannheim, Germany (e-mail: ). · 3 Heinrich-Heine-University Düsseldorf, Universitätsstraβe 1, 40225 Düsseldorf, Germany (e-mail: )

Abstract

The German economy exhibits rising service and declining manufacturing employment, but this decline is much sharper in import-competing than 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.

DOI
10.1257/aer.p20171025
Volume
107
Issue
5
Pages
337-342
Language
en
Sources
openalex crossref

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