econstor

repec.nep.lma

n?u=RePEc:zbw:wuewwb:135&r=lma

1 Introduction

In recent decades, the manufacturing sector has experienced a significant downturn in developed economies.

Employment and output shares have fallen by up to two thirds since the 1970s. Simultaneously, the role of

globalization, which has boosted international trade across a growing number of countries is highly debated.

According to World Bank data global trade volume has nearly tripled since 1990 with a special focus on

emerging countries, witnessing a spectacular rise in the international exchange of goods and services. Whereas

other factors, including skill-biased technological change (Katz and Autor, 1999, Berman et al., 1994, and

Machin and Van Reenen, 1998), play a prominent role in explaining labor market developments in the

manufacturing sector since the 1970s, trade aspects have drawn increased attention in recent years. Although

the impact of technological progress has become more skill-neutral in recent years (Autor et al., 2015), the

manufacturing sector continues to become ever less important in terms of employment and output shares

(Figure 1). A bulk of papers has since completed to determine the role of globalization and its impact on

labor market outcomes.

SWE

FIN

BEL

JPN

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

USA

NLD

GBR

DEU

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

ITA

AUT

FRA

ESP

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

.05 .1 .15 .2 .25

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

1995 2000 2005 2010

Figure 1 Manufacturing employment as share of total employment, 1995 = 100.

Thus far, previous research on the trade-employment nexus has focused on single countries using firmlevel

data, whereas cross-national analyses on this topic have been rather scarce.

While country-specific

investigations offer a profound analysis for the particular case, they may say little about the overall impact

2