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Manufacturing growth and local employment multipliers in China

Ting Wang and Areendam Chanda

Journal of Comparative Economics, 2018, vol. 46, issue 2, 515-543

Abstract: We study the impact of employment growth in manufacturing on job creation in the non-tradable sector for prefecture-level cities in China. Using the 2000 and 2010 Censuses of Population, we apply the shift-share approach to isolate the exogenous change of employment growth in manufacturing. For every hundred new manufacturing jobs, we find that 34 additional jobs are created in the non-tradable sector. We also show that the effect is heterogeneous along a number of dimensions. More specifically, one new job in high-technology manufacturing creates more jobs in the non-tradable sector while low-technology manufacturing employment growth has no significant multiplier effect. Among the non-tradable industries, the multiplier is the largest for wholesale, retail, and catering. Finally, the effect is also geographically heterogeneous, with the multiplier being greater for inland regions.

Keywords: Structural transformation; Local labor markets; Regional spillovers; China (search for similar items in EconPapers)
JEL-codes: O14 O18 R11 N95 (search for similar items in EconPapers)
Date: 2018
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