The People’s Republic of China’s Import Competition and Skill Demand in Japanese Manufacturing

Nobuaki Yamashita

No 644, ADBI Working Papers from Asian Development Bank Institute

Abstract: We examine the hypothesis that manufacturing industries in Japan that have been exposed to import competition from the People’s Republic of China (PRC) experience greater skill upgrading (increased demand for skilled workers). Using an industry panel dataset over the period 1980–2010, we exploit variations of worker skill categories by occupation, paired with detailed information and communication technology investment data in the employment share regression. We find that while the PRC’s comparative advantages in exports have shifted from labor-intensive to more capital-intensive products, this has not resulted in substituting skilled workers in Japanese manufacturing. Rather, it has had the profound positive effect of raising overall demand for skilled workers. Most of the competition effects were felt among production workers, leaving middle-skilled workers largely unaffected.

Keywords: import competition; skill upgrading; skilled workers; manufacturing (search for similar items in EconPapers)
JEL-codes: D24 F17 O47 O57 R15 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2017-01-24
New Economics Papers: this item is included in nep-cna and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0644

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