Full text: Wirtschaft und Gesellschaft - 2008 Heft 3 (3)

34. Jahrgang (2008), Heft 3 Wirtschaft und Gesellschaft
8.2%-points actual decline in the wage share, however the direction is 
suggestive. Overall in the total economy the increase in the Eastern affili-
ate employment has resulted in a 1.8%-point decline in the wage share. 
5. Estimation results: trade effects
5.1 Employment
Table 4a shows the cumulative effect of each explanatory variable on 
employment in total industry and in sub-pools of high vs. low skilled ma-
nufacturing sectors, calculated as the long run coefficients (based on the 
significant coefficients in the estimation of equation 2a) multiplied by the 
actual change in the explanatory variable.     
Intermediate import penetration by the East has a significant negative 
long-run effect on employment in total manufacturing. The effect is spe-
cific to the high skilled sectors. However due to low number of cross sec-
tions the estimations for sub-sector groups must be discussed with cau-
tion. In low skilled sectors it seems that intermediate import penetration 
by the East is leading to positive employment effects via scope changes. 
Intermediate import penetration by the developed countries has a positive 
effect in total manufacturing, and in particular high skilled sectors, but a 
negative effect in low skilled sectors. Final imports from the East also have 
a negative effect in low skilled sectors. In total manufacturing both types 
of imports from the rest of the world have a positive employment effect, 
indicating the dominance of scale effects to substitution effects and the 
presence of a complementary relationship. 
In terms of economic significance, it is estimated that intermediate import 
penetration from the East, which increased 4.6%-points during 1990-2005 
in manufacturing, has resulted in a cumulative decline of 20.7% in to-
tal manufacturing employment, which actually decreased 16.5% during 
1990-2005. Overall summing up all the import effects we find a net effect 
of 1.6% decline in manufacturing employment due to total imports (11104 
jobs). The effect is minor, nevertheless employment would have decrea-
sed 1.6% less in manufacturing without imports.
The results for the blue and white collar workers hint at an expected fin-
ding: The cumulative effect of imports on blue collar workers’ employment 
in manufacturing is negative and on white collar workers it is positive.    
Although the effect of imports are mixed, when the effect of exports are 
also incorporated, we find a positive total trade effect in total manufactu-
ring, however only regarding trade with the rest of the world. The positive 
effects of exports and negative effects of at least some import compo-
nents seem to cancel out with respect to the effect of trade with developed 
countries or the East.

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