Research On The Impact Of Intermediate Goods Trade On Labor Demand Of Industrial Sector In China

With the continuous development of economic globalization and international production system,intermediate goods trade based on intra-product specialization has developed rapidly and became the principal means of international trade.China takes advantage of labor cost to actively engage in intra-product division of labor and intermediate goods trade.Therefore,it is of great practical significance to study the issues related to intermediate goods trade and labor demand in China.Based on the panel data of 31 industrial sectors in China from 2005 to 2016,this paper studies the impact of intermediate goods trade on labor demand from two aspects: the level of labor demand and the elasticity of labor demand,and focuses on the impact of technological advances caused by trade in intermediate goods on labor demand.Firstly,this paper reviews the previous theoretical and empirical studies.Secondly,based on the perspective of intermediate goods trade,this paper analyzes the issues of labor demand based on the models of outsourcing theory,endogenous technological progress and the production function of Cobb-Douglas,and manages to figure out the causes of intermediate goods trade and its impact on labor demand so that the transmission mechanism could be sorted out and summarized.Moreover,a typical fact analysis is conducted based on the current trends of intermediate goods trade and labor demand.Finally,using the fixed-effects model,static panel regression is performed based on the full sample data of the overall employment in industry and the sub-sample data classifying by the industry characteristics,and the empirical results are tested using the system GMM model based on the full sample data.Finally,according to the theoretical analysis and empirical results,some policy suggestions are put forward to increase employment in China’s industrial sector and reduce employment risks.The main conclusions of this paper are as follows:(1)The import of intermediate goods trade has a negative impact on the the overall demand of labor force,but the degree is very limited,and this negative correlation is mainly reflected in low-tech industries,and has a promoting effect on the employment of labor force in high-tech industries.(2)The export of intermediate products has a positive impact on the total employment and low-skilled employment of the industrial labor force,while the highskilled workers are insensitive to export trade in intermediate goods.(3)The substitution effect of import trade in intermediate goods on overall employment of industrial sectors will weaken with technological progress.From the results of regression classifying by the characteristics of industries,the technological progress caused by the import trade of intermediate goods will strengthen the substitution effect of intermediate goods for low-skilled labor force,at the same time,will further strengthen its effect on promoting the employment of high-skilled labor force.(4)The promotion of export trade in intermediate goods on the total employment of industrial sectors will be weakened with technological progress.(5)Increased import trade of intermediate products will increase the demand elasticity of the whole and low-skilled labor force,but the demand elasticity of the high-skilled labor force will decrease.And the demand elasticity of the whole labor force will be reduced by the increase of the export trade in intermediate goods,so will the low-skilled and high-skilled labor force.