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The evolution of tradable and non-tradable employment: evidence from France

Philippe Frocrain and Pierre-Noël Giraud ()
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Philippe Frocrain: CERNA i3 - Centre d'économie industrielle i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris
Pierre-Noël Giraud: CERNA i3 - Centre d'économie industrielle i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris

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Abstract: Technological advances in information and communication, transportation, as well as falling formal barriers to trade enlarged the number of goods and services that can be traded internationally. This provided employment opportunities and risks. In this paper, we analyse employment growth trends across tradable and non-tradable industries in France over the period 1999-2013. We classify industries into tradable and non-tradable categories using an index of geographic concentration, since for tradable industries production tends to be geographically separated from consumption. First, we show that tradable employment is in the minority and decreased significantly as a proportion of total employment, from 30% to 26.8%. Second, we observe a shift among tradable jobs towards tertiary activities: jobs in tradable services now represent more than half of tradable employment and are rising faster than jobs in non-tradable services. Third, the fall in tradable employment was accompanied by widening wage and labor productivity gaps between tradable and non-tradable workers. Labor productivity and wages are indeed higher for tradable jobs while the structure of skills is similar in the two sectors. Lastly, we examine how tradable jobs are distributed across French employment areas (local labor markets) and how their development impact non-tradable employment locally. We observe that employment growth in tradable services mostly benefits major cities and tourist areas. In contrast, the employment decline in the rest of the tradable sector disrupts a great number of less-dense areas. Those local variations in tradable employment are crucial for the non-tradable sector which is highly dependent on local demand. According to our estimates, from 2004 to 2013, for every 100 new tradable jobs that emerged in an employment area in mainland France, 64 additional non-tradable jobs were created in the same area.

Date: 2017-05-11
Note: View the original document on HAL open archive server: https://hal-mines-paristech.archives-ouvertes.fr/hal-01695159
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