TY - JOUR
T1 - China's impact on regional employment
T2 - Propagation through input–output linkages and co-location patterns
AU - Kainuma, Shuhei
AU - Saito, Yukiko U.
N1 - Funding Information:
This study is conducted as part of the project ‘Dynamics of Inter-organizational Network and Firm Lifecycle’ undertaken at Research Institute of Economy, Trade and Industry (RIETI). We gratefully acknowledge the financial support from the Japanese Society for the Promotion of Science (no.18H00859, 20K20511). We thank the Statistics Bureau of Japan for access to the data set used for this project. We thank Associate Editor Chris Milner and two anonymous referees for their constructive comments. We are also grateful to Michal Fabinger, Nobuyuki Hamaguchi, Masayuki Morikawa and Makoto Yano for their helpful feedback. The majority of this study was completed when the first author was affiliated with The University of Tokyo. Editing services have been provided by Philip C. MacLellan. All remaining errors and omissions are the responsibility of the authors.
Funding Information:
This study is conducted as part of the project ‘Dynamics of Inter‐organizational Network and Firm Lifecycle’ undertaken at Research Institute of Economy, Trade and Industry (RIETI). We gratefully acknowledge the financial support from the Japanese Society for the Promotion of Science (no.18H00859, 20K20511). We thank the Statistics Bureau of Japan for access to the data set used for this project. We thank Associate Editor Chris Milner and two anonymous referees for their constructive comments. We are also grateful to Michal Fabinger, Nobuyuki Hamaguchi, Masayuki Morikawa and Makoto Yano for their helpful feedback. The majority of this study was completed when the first author was affiliated with The University of Tokyo. Editing services have been provided by Philip C. MacLellan. All remaining errors and omissions are the responsibility of the authors.
Publisher Copyright:
© 2022 The Authors. The World Economy published by John Wiley & Sons Ltd.
PY - 2022/11
Y1 - 2022/11
N2 - How do imports from China affect local labour markets in Japan? We examine this question using commuting zones as regional units and analysing shock propagation through supply chains and co-location patterns. Applying the method proposed by Autor et al. (American Economic Review, 103, 2121, 2013) and Acemoglu, Autor et al. (Journal of Labor Economics, 34, S141, 2016), we examine the impact of import shocks on regional manufacturing employment using input–output tables which allows us to investigate the propagation of shocks to both upstream and downstream industries and to relate the regional impact to industry co-location patterns. We find that the negative direct effect on local employment is underestimated in previous studies that do not consider the regional propagation of the shock through supply chains, especially the positive shock to downstream industries. Downstream industries in Japan, for example, significantly benefit from imports from China as they lower input prices and increase employment. In contrast to downstream industries, we find no significant impact on upstream industries. Our results imply that the direct negative effect on local labour markets is somewhat mitigated by effects on downstream industries within the same region.
AB - How do imports from China affect local labour markets in Japan? We examine this question using commuting zones as regional units and analysing shock propagation through supply chains and co-location patterns. Applying the method proposed by Autor et al. (American Economic Review, 103, 2121, 2013) and Acemoglu, Autor et al. (Journal of Labor Economics, 34, S141, 2016), we examine the impact of import shocks on regional manufacturing employment using input–output tables which allows us to investigate the propagation of shocks to both upstream and downstream industries and to relate the regional impact to industry co-location patterns. We find that the negative direct effect on local employment is underestimated in previous studies that do not consider the regional propagation of the shock through supply chains, especially the positive shock to downstream industries. Downstream industries in Japan, for example, significantly benefit from imports from China as they lower input prices and increase employment. In contrast to downstream industries, we find no significant impact on upstream industries. Our results imply that the direct negative effect on local labour markets is somewhat mitigated by effects on downstream industries within the same region.
KW - import competition
KW - industry co-location
KW - input–output linkages
KW - international trade
KW - local labour markets
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U2 - 10.1111/twec.13251
DO - 10.1111/twec.13251
M3 - Article
AN - SCOPUS:85125558710
SN - 0378-5920
VL - 45
SP - 3559
EP - 3601
JO - World Economy
JF - World Economy
IS - 11
ER -