Employment effects of China’s manufacturing outward migration: a study based on cross-country input-output model

ZHU Kepeng1 FAN Shide2

(1.School of Business, Anhui University of Technology)
(2.School of Economics, Nanjing Audit University)

【Abstract】With escalating labor costs and industrial upgrading, some manufacturing industries are migrating outward from China. The paper establishes a cross-country input-output model by the data of World Input-Output Database. It empirically analyzes the characteristics of China’s manufacturing outward migration and its employment effects from 2009 to 2014. The paper finds that most migrations are active rather than passive. The industries that migrate outward are likely to be labor intensive or pollution-intensive while the skill-intensive industries migrate inward. The outward migration has little impact on domestic employment, with only 0.095% of jobs being affected annually, which cannot explain the recent declines in manufacturing employment. Labor-intensive industries and low-skilled workers are more affected, especially in the industries with production migrations of intermediate and final domestic goods. In the new stage of development, we should combine the manufacturing migrations with upgrading of industrial structure, improvement of labor quality, and enhancement of environmental governance.

【Keywords】 manufacturing migration; cross-country input-output model; employment effects;

【DOI】

【Funds】 General Project of Philosophy and Social Science Planning of Anhui Province (AH-SKYG2017D133)

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    Footnote

    [1]. ① According to the 2014 data in World Input-Output Database (2016 edition), the industries ranked in ascending order of capital labor ratio are: manufacture of textiles, wearing apparel and leather products; manufacture of furniture and other manufacturing; manufacture of wood and of products of wood and cork, except furniture; manufacture of machinery and equipment; printing and reproduction of recorded media; manufacture of food products, beverages and tobacco products; manufacture of electrical equipment; manufacture of fabricated metal products, except machinery and equipment; manufacture of rubber and plastic products; manufacture of other non-metallic mineral products; manufacture of motor vehicles, trailers and semi-trailers; manufacture of other transport equipment; manufacture of computer, electronic and optical products; manufacture of paper and paper products; manufacture of basic metals; manufacture of chemicals and chemical products; manufacture of basic pharmaceutical products and pharmaceutical preparations; and manufacture of coke and refined petroleum products. The industries of outward migration such as industries of textile, wood and straw products are relatively high in labor intensity, which are typical labor-intensive industries, while the manufacture of paper and paper products that migrates outward is relatively low in labor intensity, which is a pollution-intensive industry, according to the identification of Wang et al. (2017). [^Back]

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This Article

ISSN:1000-7881

CN: 11-1043/C

Vol , No. 01, Pages 33-46+126-127

February 2019

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Article Outline

Abstract

  • 1 Introduction
  • 2 Research method
  • 3 Empirical results
  • 4 Further discussion
  • 5 Conclusion and implication
  • Footnote

    References