Services Trade and Labor-Demand Elasticities of Service Sector: Empirical Evidence from China
Affiliation(s)
School of Economics and Business Administration, Beijing Normal University, Beijing, China.
School of Economics and Business Administration, Beijing Normal University, Beijing, China.
ABSTRACT
This paper analyses the impact of services trade on the labor-demand elasticities of service sector with the data of China from 1982 to 2009.we find that: 1) First, no matter in the long run or in the short term, China’s services export distinctly impacts on the labor-demand elasticities of service sector. In the long-term influence, the substitution effect is much more powerful than the output effect, however, as to the short period, the output effect is a little stronger than the substitution effect; 2) Second, in the long run, we cannot reject the hypothesis of no relationship between service import openness and the labor-demand elasticities of service sector. Whereas, studying the result of the short term, trade liberalization of services import does affect the service sector labor-demand elasticity weakly.
This paper analyses the impact of services trade on the labor-demand elasticities of service sector with the data of China from 1982 to 2009.we find that: 1) First, no matter in the long run or in the short term, China’s services export distinctly impacts on the labor-demand elasticities of service sector. In the long-term influence, the substitution effect is much more powerful than the output effect, however, as to the short period, the output effect is a little stronger than the substitution effect; 2) Second, in the long run, we cannot reject the hypothesis of no relationship between service import openness and the labor-demand elasticities of service sector. Whereas, studying the result of the short term, trade liberalization of services import does affect the service sector labor-demand elasticity weakly.
KEYWORDS
Trade Liberalization; Labor-Demand Elasticities; Service Sector; Substitution Effect; Output Effect
Trade Liberalization; Labor-Demand Elasticities; Service Sector; Substitution Effect; Output Effect
Cite this paper
H. Wei, Q. Fu and S. Yang, "Services Trade and Labor-Demand Elasticities of Service Sector: Empirical Evidence from China," American Journal of Industrial and Business Management, Vol. 2 No. 4, 2012, pp. 136-144. doi: 10.4236/ajibm.2012.24018.
H. Wei, Q. Fu and S. Yang, "Services Trade and Labor-Demand Elasticities of Service Sector: Empirical Evidence from China," American Journal of Industrial and Business Management, Vol. 2 No. 4, 2012, pp. 136-144. doi: 10.4236/ajibm.2012.24018.
References
[1] D. S. Hamermesh, “Labor Demand,” Princeton University Press, Princeton, 1993. [2] D. Rodrik, “Has Globalization Gone too Far?” Institute for International Economics, Washington DC, 1997. [3] M. J. Slaughter, “International Trade and Labor Demand Elasticities,” Journal of International Economics, Vol. 54, No. 1, 2001, pp. 27-56. doi:10.1016/S0022-1996(00)00057-X [4] R. Hasan, D. Mitra and K.V. Ramaswamy, “Trade Reforms, Labor Regulations and Labor Demand Elasticities: Empirical Evidence From India,” Working Paper 9879, NBER, 2003. [5] I. Haouas and M. Yagoubi, “Trade Liberalization and Labor-Demand Elasticities: Empirical Evidence from Tunisia,” IZA Discussion Paper, No. 1084, 2004. [6] P. Fajnzylber and W. F. Maloney, “Labor Demand and Trade Reform in Latin America,” Journal of International Economics, Vol. 66, No. 2, 2005, pp. 423-446. doi:10.1016/j.jinteco.2004.08.002 [7] S. Zhou, “Empirical Research on Trade Liberalization’s Impact on Industry Sector Labor-Demand Elasticities,” World Economy, Vol. 29, No. 2, 2006, pp. 31-40. [8] D. Greenway, R. C. Hine and P. Wright, “An Empirical Assessment of the Impact of Trade on Employment in the United Kingdom,” European Journal of Political Economy, Vol. 15, No. 3, 1999, pp. 485-500. doi:10.1016/S0176-2680(99)00023-3
[1] D. S. Hamermesh, “Labor Demand,” Princeton University Press, Princeton, 1993. [2] D. Rodrik, “Has Globalization Gone too Far?” Institute for International Economics, Washington DC, 1997. [3] M. J. Slaughter, “International Trade and Labor Demand Elasticities,” Journal of International Economics, Vol. 54, No. 1, 2001, pp. 27-56. doi:10.1016/S0022-1996(00)00057-X [4] R. Hasan, D. Mitra and K.V. Ramaswamy, “Trade Reforms, Labor Regulations and Labor Demand Elasticities: Empirical Evidence From India,” Working Paper 9879, NBER, 2003. [5] I. Haouas and M. Yagoubi, “Trade Liberalization and Labor-Demand Elasticities: Empirical Evidence from Tunisia,” IZA Discussion Paper, No. 1084, 2004. [6] P. Fajnzylber and W. F. Maloney, “Labor Demand and Trade Reform in Latin America,” Journal of International Economics, Vol. 66, No. 2, 2005, pp. 423-446. doi:10.1016/j.jinteco.2004.08.002 [7] S. Zhou, “Empirical Research on Trade Liberalization’s Impact on Industry Sector Labor-Demand Elasticities,” World Economy, Vol. 29, No. 2, 2006, pp. 31-40. [8] D. Greenway, R. C. Hine and P. Wright, “An Empirical Assessment of the Impact of Trade on Employment in the United Kingdom,” European Journal of Political Economy, Vol. 15, No. 3, 1999, pp. 485-500. doi:10.1016/S0176-2680(99)00023-3