Catching up with the Technology Frontier: Finnish Manufacturing Productivity, 1975–2003

Abstract

Labour productivity in Finnish manufacturing industry grew at the rapid average annual rate of 5 per cent from 1975 to 2003. The labour productivity growth was broad-based, or yeast-like, in the 1970s and 1980s, with contributions from multi-factor productivity gains in the paper and metal industries dominating. In the 1990s productivity growth was much more mushroom-like, that is, concentrated in the electronics industry. The level of labour productivity in Finnish manufacturing matched that of the USA by the end of the second millennium. Labour costs and unit labour costs remained at only three-quarters of the US level, although real hourly compensation increased steadily. After 1995 manufacturing industry constituted a quarter of the Finnish economy but contributed a third of overall economic growth.     

对发展中国家的贸易与美国制造业的就业变动

本文利用1997～2006年美国制造业的面板数据,从静态和动态的角度实证检验了美国制造业与发展中国家的进、出口贸易对美国制造业就业总量的影响。估计结果表明,考虑进、出口贸易对技术创新的驱动作用以后,进、出口贸易对就业的影响与理论预期存在不一致性,进口贸易不仅没有通过替代国内生产而减少劳动密集制造部门对劳动力的需求,反而促进了该部门的就业增长;出口贸易也没有通过产出扩大效应而增加劳动密集制造部门对劳动力的需求,出口贸易对就业的促进效应仅仅体现在技术密集制造部门。由于美国劳动力市场中存在价格效应、规模效应和劳动力需求的趋势效应,与发展中国家的进、出口贸易对美国制造业就业的影响呈现明显的滞后性和动态调整特征。     

Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries

This paper provides some of the first empirical evidence on labour market adjustments to exchange rate movements in Canadian manufacturing industries. Controlling for endogeneity using generalized method of moments estimation, it is found that during the 1981–1997 period, exchange movements have a substantial impact on labour input and that this impact has grown over time as the manufacturing industries have become more exposed to trade. In contrast, the exchange rate effect on real wages is estimated to be virtually zero for all manufacturing industries.

Geographical location and urbanisation of the Swedish manufacturing industry, 1900–1960: evidence from a new database

Abstract

This article introduces a new database, based on official statistics, of regional manufacturing industries in Sweden. We employ this database to examine the distribution of manufacturing activity across Swedish regions and cities, 1900–1960. Over this period we observe an increasing concentration of manufacturing activities, reaching a peak around 1940, across the northern, southern and western parts (NUTS-I areas) of Sweden. Over the same period, the North-South divide in terms of manufacturing employment grew larger. Across counties (NUTS-III) and cities we, however, observe two shorter periods of convergence of manufacturing activities, in the early twentieth century and in the post-war period, whereas the inter-war period was characterised by divergence. These developments occurred to the backdrop of the urbanisation of industry in Sweden, as the rural share of manufacturing employment declined from roughly 60 to 25% between 1900 and 1960. We also find that the regional patterns of individual industries over time followed different trajectories, suggesting that that the determinants of industry location differed significantly across industries.     

The Structure of Indonesian Manufacturing Industry: An Input-Output Approach∗

The paper examines the structure of Indonesia's manufacturing sector, using data from the 1980 input-output tables., and supporting data from various industrial surveys and national accounts. An input-output analysis of sectoral linkages and factor demand (labour, proxies for skill and capital, imports) is used to derive implications for growth and employment of two contrasting industrial development strategies — a labour-intensive strategy and a more capital-intensive strategy fostering basic industries. It is argued that a labour-intensive, resource-based, and export-oriented strategy combined with selective import substitution is most likely to achieve the stated development goals of the Indonesian government.

     

Integration and intra-industry trade adjustment in South Africa

This article analyses intra-industry trade adjustment by the Southern African Customs Union after 1994, and links between trade liberalisation and employment are examined. The traditional Grubel-Lloyd index is complemented by marginal inter- and intra-industry trade measures, and trade expansion of sectors is scaled, related to change in total exports and imports. In three different empirical approaches, large differences are found: in the level of intra-industry trade (IIT) between different sectors (categorised into resource-based, labour-intensive, scale-intensive and differentiated industries); in the level of IIT of individual sectors in trade with the SADC6, the European Union and the rest of the world; and in the economic significance of trade expansion for different industries and with different trading partners. Trade expansion is dominated by differentiated and scale-intensive industries, indicating that the main economic gain of international integration is found in the opportunity to exploit economies of scale in a larger market. IIT and marginal IIT are positively related to increases in labour productivity, and negatively related to employment change. Interindustry trade and both export and import expansions are positively related to employment gain, but only export is positively related to increased labour productivity.     

A Flexicurity Labour Market in the Great Recession: The Case of Denmark

Flexicurity labour markets are characterised by flexible hiring/firing rules, a generous social safety net, and active labour market policies. How can such labour markets cope with the consequences of the Great Recession? This paper takes a closer look at this question considering the case of Denmark. It is found that employment adjustment is not particularly large in international comparison, but a larger burden of adjustment is along the extensive (number of employees) rather than the intensive (hours) margin. The level of job creation is high, and remains so despite the crisis, although job creation is pro-cyclical and job-separation counter-cyclical. As a consequence most unemployment spells remain short. Comparative evidence does not suggest that flexicurity markets are more prone to persistence. Crucial for this is the design of the social safety net and in particular the active labour market policy. However, it is a challenge to maintain the efficiency of the activation system in a period with high unemployment.     

Women's work and structural change: occupational structure in eighteenth‐century Spain

This article uses the declarations of householders in the Cadaster of Ensenada (1750–5) to calculate labour participation rates for women and men from 22 localities in inland Spain. The article establishes the actual levels of women's market activity, which are much higher than commonly assumed. This unique source also makes it possible to analyse the region's occupational structure. Due to the labour‐intensive character of manufacturing work, the abundant supply of cheap labour, the diffusion of cottage industries, and the demand for commodities from internal and colonial markets, a large portion of the region's population worked in manufactures in the eighteenth century. This finding challenges standard interpretations of the Spanish economy at this time as mostly agricultural, which rely on sources that exclude women workers. Most workers in the manufacturing sector were women, and their market activity was concentrated in textile manufacturing. Once women are included in the analyses, the industrial share of employment follows a U‐shaped trajectory from the eighteenth century to the twentieth century. The article concludes that the standard interpretation of structural change, based solely on empirical evidence for male workers, gives a misleading picture of when, where, why, and how structural change occurred.     

Labour hoarding in Dutch manufacturing industry

Summary Comfronting strong output fluctuations, companies are in no position to adjust their labour volume instantly to the technically efficient level. Because of that, they may find themselves with an internal labour reserve at one moment, and be short of labour at another. This phenomenon is called labour hoarding. In this article we propose a new method for the measurement of labour hoarding and apply it to the Dutch manufacturing industry. The results suggest that in the period 1972 to 1982, labour surpluses in that sector varied between five and fifteen percent of employment. Labour shortages appear to have been minor in the same period. Output uncertainty and real wage costs are supposed to be the main causes of the discrepancy between actual and technically efficient employment. Under this assumption an employment function is derived and fitted. The results are in accordance with the theoretical model on which the employment function was based.The author is attached to the Netherlands Economic Institute, Rotterdam.Based on the author's dissertation,Omvang en oorzaken van labour hoarding, Rotterdam, 1987.     

Electrification and industrialisation: An assessment of the industrial breakthrough in Norway

Abstract

The article relates the ‘industrial breakthrough’ in Norway to the introduction of electricity in manufacturing production. Viewing electricity as a General Purpose Technology (GPT), the new device fostered advances across a broad spectrum of sectors. Several other key technologies (e.g., within chemical industries) also played their part. However, in Norway, electricity took an extraordinarily strong position. By presenting quantitative evidence of the electrification process, and relating it to annual estimates of employment, productivity and value added between 1896 and 1920, it is shown that the manufacturing sector was too small to form a ‘breakthrough’ before the turn of the century. It was not until the widespread introduction of electricity and electric motors gained some momentum in the first decades of the twentieth century that the economy become really industrialised.     

Manufacturing Sector Growth: A Case Study of Singapore

Abstract

This paper attempts to highlight some of the challenges faced by the Singaporean economy in general and the manufacturing sector in particular. Statistical analysis is used to demonstrate the role of human capital and foreign investment on manufacturing output for the period 1980–2004. The paper shows that a long-run relationship exists among the real manufacturing output per-unit of employment, real foreign investment per-unit of employment and real human capital per-unit of employment. The paper also provides time series forecasts for the growth rates of real output, productivity and investment in Singaporean manufacturing sector.     

基于因子分析的区域制造业竞争力研究——以山东省为例

文章采用因子分析法对山东省制造业30个行业的竞争力相对全国平均水平进行了综合评价,结论表明目前山东省制造业整体发展水平处于劳动密集型产业向资本密集型产业过渡阶段,具有竞争优势的产业以传统的劳动密集型产业为主,支柱产业以及重点发展产业的产业聚集度还不高,规模经济效应不明显。     

Creating manufacturing jobs in India: Has openness to trade really helped?

After following inward oriented economic policies for nearly four decades, India opened up to international trade in the early 1990s. Since then, the trade integration of the Indian economy in general and the manufacturing sector in particular has increased phenomenally. Against this backdrop, this paper analyses the direct as well as indirect impact of trade on jobs in the Indian manufacturing sector. Using the growth accounting approach, we find that the direct impact of trade on manufacturing jobs has been positive. However, trade induced decrease in labour demand has neutralized direct job gains to a great extent. Therefore, unlike other Asian economies, the overall employment gain from trade has been minimal. The paper argues that supply side constraints should be addressed urgently to enhance job gains from international trade.     

Is Structural Change Speeding Up? The Case of Sweden, 1850–2000

Abstract

This article focuses on the importance of structural change on productivity growth and conditions in the labour market. From a productivity perspective, a positive relation is found between structural change and productivity growth from the industrial breakthrough until the first oil crisis. From the early 1970s, this positive relation weakened and eventually became negative as labour moved from high to low productive industries. From a labour market perspective, it is found that extent of sectoral reallocation of labour has become more intense over the twentieth century. The extent of job gains and losses seems to have been more intense during the postwar period than during the industrialization phase.     

The Rising Supply of College Graduates and Declining Returns for Young Cohort: The Case of Korea

Abstract

This study analysed the effect of an increase in the supply of youth college graduates, in terms of the return on education. The rate of return on education in Korea substantially dropped from 1983 to 1994. Since then, however, the declining trend of the rate of return on education stopped and turned upward. The rate of return has declined especially for college graduates, and such a decline has been most prominent for young cohorts, among college graduates, since 1987. The observed trend of the rate of return appears to be related to the sharp increase of labour supply of college graduates since the mid 1980s.

The elasticity of substitution between education levels and age groups was estimated in this study, using a generalized demand-supply model. The effects of relative supply of college graduates (as a whole and by age) on the relative wages of college graduates by age were analysed under the assumption of constant skill-biased technological change. As it turned out, the relative college graduates’ labour supply of each age group had large bearings upon relative wages of each corresponding group, while the relative labour supply of all college graduates did not. It implies that labour is an imperfect substitute, not only between education levels but also between age groups.

Thus, as youth college graduates’ supply increases, there needs to be a corresponding demand increase for them, to avoid the drop in the wage or employment level for them. Therefore, to tackle with the issues of youth labour market, such as youth unemployment, separate policies targeting the youth group are called for.     

Emigration of Indian indentured labour to the Danish West Indian Island of St. Croix 1863–68

Abstract

Throughout most of the nineteenth and the early years of the twentieth centuries, sugar planters in the colonies of Britain, France and Holland obtained their labour from India under a government-sponsored scheme of indentures. The planters of St. Croix, one of the Danish West Indian islands, attempted to solve their labour problem in a similar way, and in 1863 brought 321 Indian labourers to work on the sugar plantations. But the experiment with Indian labourers was not successful, and there was no further recruitment from India. This essay deals with some aspects of Indian emigration to St. Croix and examines the circumstances which led to the failure of the project.     

Deindustrialization and changes in manufacturing trade: Factor content calculations for 1978–1995

Input-output analysis is used to estimate the labor content embodied in changes in manufacturing output resulting from changing patterns of manufacturing trade. For ten OECD countries from the late 1970s to the mid-1990s, changes in world trade of manufactures are estimated to have had a negative net effect on manufacturing employment of 3.5 million jobs, 2.0 million in the US alone, compared to a 6.2 million decline in actual manufacturing employment. The employment losses resulted mainly from North-South trade. At the industry level, there were large losses in labor-intensive industries and in industries that were strategically targeted by developing country industrial policies. There were employment losses in nearly all manufacturing industries, not a mixture of winners and losers. Such a pattern may result not from surging imports from the South but rather declining exports to the South in the aftermath of the 1980s debt crisis. JEL no. F14, F16, O24     

The Portuguese Economy in the Irish Mirror, 1960–2004

The deepening of economic and financial integration in the European Union has led to different responses in the group of ‘cohesion’ countries. Ireland and Portugal stand out as the two extreme examples, as Ireland caught-up to the forerunners after the launching of EMU, in 1992, whereas Portugal lost ground. This paper looks at structural shifts in order to explain different economic performances within Europe. We conclude that Portugal’s labour productivity lag was the outcome of a less favourable structure of employment; that differences in the structure of employment are not clustered in specific industries; and that such structural differences are associated with different factor endowments, namely physical and human capital. Portugal has a rising competitiveness problem in international markets as real wages have increased faster than labour productivity in the 1990s. That has to be changed by policy measures, by the market through higher levels of unemployment, or by a combination of both.

How Will the Implementation of Zero Tariffs Affect Employment in China?

This paper studies the employment effect of China's possible implementation of zero tariffs by comparing China's most‐favored‐nation tariffs and the tariff schedules of China's signed free trade agreements (FTAs) with the tariff concessions in a typical high‐standard FTA. It finds that there is a large gap between China's current tariff status and a high‐standard FTA, and the implementation of zero tariffs in China would have a significant negative impact on employment in some industries. However, the employment effect of implementing zero tariffs is heterogeneous. Analysis at the industrial level shows that, although employment would drop in a few industries as a result of the implementation of zero tariffs, more jobs would be created in most industries. The overall employment effect of a zero tariff policy would be positive, creating an estimated 8.05 million jobs in China. Therefore, China should consider the adjustment costs brought by the labor movement in different industries and introduce relevant policies to deal with the employment shocks caused by zero tariffs.     

Trade openness, real exchange rates and job reallocation: evidence from Belgium

This paper investigates the impact of real exchange rate movements on job reallocation at the industry level. The analysis focuses on the manufacturing sector of Belgium, using data for 82 NACE 3-digit industries, over the time span 1996–2002. I find that real exchange rate changes do have a significant impact on job flows, and that this impact is magnified by increasing levels of trade exposure. In particular, a real appreciation is found to lower net employment growth through higher job destruction, while job creation is not significantly affected. These results are in line with previous empirical evidence on the United States, and differ from earlier findings for France and Germany, where the adjustment to real exchange rate shocks has been found to occur mainly through the job creation margin. I suggest that these differences may be explained by the fact that Belgium is a small open economy.