Download publication

External Publication

Manufacturing employment, international trade, and China

The decline in manufacturing employment is often seen as a major reason for rising inequality, social tensions, and the slump of entire communities. With the rise of national populists and protectionists in recent years, the issue has become even more prominent.

By: and Date: November 28, 2019 Topic: Global economy and trade

The objective of this paper is to better understand the evolution of manufacturing employment across the world. Manufacturing value added has grown rapidly since 2000, at least matching world GDP growth, even after the global financial crisis, reflecting mainly rising demand for manufactures especially in developing countries. However, manufacturing employment increased at only a slow pace, both before and after the global financial crisis. Manufacturing employment growth provided only about 10% of the new jobs needed to compensate for losses in agriculture and the growth of the active population. Most of the net job creation in manufacturing was in China, while most countries – both developing and developed – saw manufacturing employment decline as a share of total employment and several, including all or nearly all advanced countries, saw an absolute decline. The remarkable economic transformation in China has brought shifts in employment within the country, which were far larger, in fact of a different order of magnitude, than in other countries, entailing the redeployment towards manufacturing of tens of millions of workers, mainly drawn from agriculture. But, because China tends to consume much of the manufactures it produces, especially since the financial crisis, its increased integration into world trade is not at the root of the manufacturing employment stagnation in the rest of the world. In the sample of the countries we examined, including the United States, the increase in labour productivity in manufactures, due to automation and improved methods, was a far more important cause of employment decline than shifts in the manufacturing trade balance, contrary to a commonly held view. We find only weak evidence that the size of the manufacturing sector – measured in different ways — is associated with rapid economic growth. Several countries have grown at a reasonable pace without seeing a large increase in the relative size of their manufacturing sector. While the growth of labour productivity in the manufacturing sector is higher than that of the economy as a whole on average, several economies saw economy-wide labour productivity grow faster than labour productivity in manufacturing, including several countries in East Asia.

Read article More by this author
 

Podcast

Podcast

Technology: a product of unequal power?

The effects of digital technology on work and wages.

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: November 24, 2021
Read article More on this topic
 

Blog Post

Goodbye Glasgow: what’s next for global climate action?

After COP26, and as the debate on whether Glasgow represents a success or a failure dies down, what next for global climate action?

By: Klaas Lenaerts and Simone Tagliapietra Topic: Green economy Date: November 18, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

Why is China cracking down on big tech?

A look at China’s recent regulatory efforts in the digital space.

By: The Sound of Economics Topic: Global economy and trade Date: November 10, 2021
Read about event More on this topic
 

Past Event

Past Event

Phasing out COVID-19 emergency support programmes: effects on productivity and financial stability

How can European countries phase out the COVID-19 support measures without having a negative impact on productivity and financial stability?

Speakers: Eric Bartelsman, Maria Demertzis, Peter Grasmann and Laurie Mayers Topic: Macroeconomic policy Date: November 9, 2021
Read article More on this topic More by this author
 

Blog Post

What to make of the EU-US deal on steel and aluminium?

While deeply disappointing that the surprise deal maintains aluminium and steel tariffs against the EU beyond a modest quota, it alleviates a major irritant in transatlantic relations and contains interesting and innovative features relating to climate policy and to dispute settlement under WTO rules.

By: Uri Dadush Topic: Global economy and trade Date: November 4, 2021
Read article
 

Blog Post

European governanceInclusive growth

The socioeconomic effects of COVID-19 on women

The pandemic has disproportionately affected women both professionally and at home. Although the gender gap in labour force participation since the onset of the pandemic hasn't worsened, policy still needs to tackle existing gender gaps, which for some EU countries are very substantive.

By: Maria Demertzis and Mia Hoffmann Topic: European governance, Inclusive growth Date: November 3, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

The state of trade: the EU's trade policy

A conversation with Member of the European Parliament Bernd Lange on the European Union’s trade policy.

By: The Sound of Economics Topic: Global economy and trade Date: November 3, 2021
Read article More on this topic
 

Blog Post

Strong, balanced, sustainable and inclusive growth? The G20 and the pandemic

The G20 is not doing enough to support strong, balanced, sustainable and inclusive growth in the wake of COVID-19, with the poorest countries left behind by the recovery.

By: Suman Bery and Pauline Weil Topic: Global economy and trade Date: October 29, 2021
Read article Download PDF
 

Parliamentary Testimony

European ParliamentInclusive growth

Understanding the socioeconomic effects of the COVID-19 pandemic on women

Testimony before the European Parliament's Committee on Economic and Monetary Affairs (ECON) on the consequences of the pandemic on women.

By: Maria Demertzis and Mia Hoffmann Topic: European Parliament, Inclusive growth, Macroeconomic policy Date: October 27, 2021
Read article
 

Opinion

COP26: why carbon pricing is crucial to China’s climate change pledges

China’s emissions trading scheme is a welcome but to reach its full potential, it needs to cover more of China’s emissions, go beyond the electricity sector and let prices reflect the true cost of carbon.

By: Alicia García-Herrero and Junyu Tan Topic: Global economy and trade, Green economy Date: October 22, 2021
Read article
 

Blog Post

Inclusive growth

Concentration of artificial intelligence and other frontier IT skills

Online job postings indicate that demand from top tech firms for frontier IT skills is about double their demand for other IT skills. This could indicate increasing concentration of skills in a few firms, with other firms left behind.

By: Wang Jin, Georgios Petropoulos and Sebastian Steffen Topic: Digital economy and innovation, Inclusive growth Date: October 21, 2021
Read article More by this author
 

External Publication

Global Economic Resilience: Building Forward Better

A roadmap for systemic economic reform calling for step-change in global economic governance to increase resilience and build forward better from economic shocks, prepared for the G7 Advisory Panel on Economic Resilience.

By: Thomas Wieser Topic: Global economy and trade, Macroeconomic policy Date: October 14, 2021
Load more posts