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Labor Market Impact of Disruptions in Global Value Chains

Author

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  • Meister, Moritz

    (Institute for Employment Research (IAB), Nuremberg, Germany ; Kiel University)

Abstract

"This paper investigates the causal effect of global value chain (GVC)-related trade on the German labor market during the COVID-19 crisis, using a difference-in-differences approach combined with entropy balancing. The analysis of monthly establishment-level data from January 2019 to December 2021 shows that a one standard deviation increase in GVC-related trade with China leads to an increase in short-time work of up to 27 percentage points, with significant positive effects observed from May to October 2020. For this period, the regression results imply that a one standard deviation increase in GVC integration gives rise to an additional expenditure on short-time work of around 7.3 billion euros. In contrast, GVC-related trade with the whole world as a trading partner does not show a significant impact. Additional survey data support these findings, suggesting that establishments that are more GVC-integrated with China face more difficulties in obtaining inputs or dealing with suppliers in 2020." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Meister, Moritz, 2024. "Labor Market Impact of Disruptions in Global Value Chains," IAB-Discussion Paper 202410, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:202410
    DOI: 10.48720/IAB.DP.2410
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    Keywords

    Bundesrepublik Deutschland ; China ; Pandemie ; IAB-Open-Access-Publikation ; Außenhandel ; Auswirkungen ; Beschäftigungseffekte ; Betriebsunterbrechung ; Globalisierung ; IAB-Betriebs-Historik-Panel ; IAB-Betriebspanel ; internationale Arbeitsteilung ; Kurzarbeit ; Produktionsorganisation ; regionaler Arbeitsmarkt ; Wertschöpfung ; Wirtschaftszweige ; Zulieferer ; 2019-2021;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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