| Abstract: | The labour market consequences of trade and protection have only recently come under the scrutiny of labour economists. This paper seeks to accomplish two things - to survey the recent research and to provide estimates of the effect that reductions in effective rates of assistance afforded to Australia's manufacturing industries have had on employment. Recent labour market developments reveal a downward trend in manufacturing employment levels. The declines appear to have been associated with lower levels of assistance. However, the estimates of the effect of lower levels of protection are generally small - about a one per cent reduction in employment for each ten per cent reduction in the effective rate of industry assistance. In addition, the manufacturing employment developments appear to be only weakly linked to real wage resistance. Overall, an overriding impression from the find ings presented in this paper is the strength of the structural adjustments ongoing in Australia |
