2019 Reports

Trade Effects on Job Changes through Job Creation and Destruction Responses

Endoh, Masahiro

This study estimates the impact of both export and import shocks on the creation and destruction of jobs. Using Japanese jobs data from 1996 to 2016, I take a conservative approach to see the effects of trade on jobs according to industry. Results show that trade shocks change a greater number of jobs through establishments’ extensive margin than through their intensive margin. Additionally, trade shocks have the effect of creating jobs in smaller establishments and cutting jobs in larger establishments. The implied net job change accounts for 12–15 percent of total manufacturing job decreases, half of those based on liberal, widely-used estimates.