Services Policy Reform and Manufacturing Employment: Evidence from Transition Economies

Matteo Fiorini, Bernard Hoekman and Clément Malgouyres

No 2016/46, RSCAS Working Papers from European University Institute

Abstract: The performance of services sectors can have significant impacts on industries that use services as intermediate inputs. In this paper we complement the literature analyzing the productivity effects of services trade policies by investigating the relationship between services policy reforms and employment in manufacturing industries. Using a panel of sector-level data for 24 transition economies for the 1990-2012 period, we find find that moving towards best practice services policies is associated with an economically significant reduction of manufacturing employment. This negative effect is mitigated or disappears for countries with high levels of economic governance and human capital. The decline in manufacturing employment is observed only in the first decade of transition, with the major driver being reforms in the utilities sector. The estimated negative effect of policy reforms is of a contemporaneous nature; it does not persist along the lag structure.

Keywords: services policy; employment; transition economies (search for similar items in EconPapers)
JEL-codes: F16 F66 J23 P21 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-tid
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Related works:
Journal Article: Services policy reform and manufacturing employment: Evidence from transition economies (2018)
Working Paper: Services Policy Reform and Manufacturing Employment: Evidence from Transition Economies (2017)
Working Paper: Services Policy Reform and Manufacturing Employment: Evidence from Transition Economies (2016)
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