The Employment Effects Of The Rmb Exchange Rate Fluctuations

As far as an open economy is concerned, the exchange rate, the price of one economy's currency, is one of the important factors that could affect the competition of both domestic and foreign commodity. The adjustment of exchange rate could make a change to the competiveness and the export and import scale of one economy, and then causes the re-collocation of labor and the change of the labor market.Currently, the fluctuation of the exchange rate and the severe unemployment are two existed problems in China. Hence, it's meaningful to make a research about the relation between the fluctuation of RMB exchange rate and the employment in different industries. In the recent years, the consecutive reforms on exchange rate regime have played a vital role in the larger and larger fluctuation of RMB exchange rate. What's more, the employments of relevant industries are affected by the fluctuation. Most of the previous researches about the relation between exchange rate fluctuation and employment are from a macro perspective or regard the Secondary Industry as a whole; there is rare research about specific industries. In order to have a deeper analysis, this thesis collects the employment data of 24 industries in China. With the help of Panel Data Model, this thesis gives a further understanding about the relation between the fluctuation of real effective exchange rate of RMB and the employment of specific industries: 18 out of 24 industries will suffer job destruction if the RMB exchange rate appreciates. The real effective exchange rate appreciates 1% the average employment will decrease by 0.144%. Meanwhile, the GDP of China as well as the foreign interest rate also has influence on the employment of the selected industries.