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Manufacturing employment adjustment: assessing the effect of trade exposure in Canada
(Lethbridge, Alta. : Universtiy of Lethbridge, Department of Economics, 2018) Abubakari, Mohammed; University of Lethbridge. Faculty of Arts and Science; Mueller, Richard E.
Using data from the 10 Canadian provinces, we assess the effect of manufacturing sector exposure to trade on employment adjustment based on static, partial and general models of adjustment. From the results across these adjustment models, real exports and real imports have positive and negative effects on manufacturing employment, respectively. This is quite consistent with the popular assertion that exports create jobs and imports displace them. However, based on the net effects analysis, there was not enough evidence to predict that trade exposure is responsible for the declining trend in manufacturing sector employment over the last two decades. When we look at trade intensity effect by country of origin, employment adjustment has different impacts, with import intensities from the U.S. and China showing positive effect, while the effect of E.U. import intensity is negative.