Academic literature on the topic 'Employment, structural transformation, trade shocks, trade liberalization'

This article presents a quantitative analysis of growth, structural change and employment linkages at the aggregate level and by sector under the state- and market-led regimes in India. The underlying objectives are: (a) to understand how economic liberalization has affected the economic and labour market structures, and linkages thereof; and (b) to analyse how these dynamics have affected the generation of productive employment in the economy. The analysis is based on Shapley decompositions. Our results suggest that the contribution of structural change in employment to growth declined drastically and secularly as the country transitioned to a high-growth regime driven by globalization. The sector-level analysis indicates that employment opportunities are not being created in high-productivity sectors and segments. Thus, despite a high-growth rate in GDP per capita and productivity-enhancing structural transformation in GDP, a vast population is still trapped in employment that cannot be qualified as productive employment. The study attributes it to trade-induced economic specialization accompanied with weakening of internal inter-sectoral linkages. The article makes a strong case for strategic government intervention to broad base structural change for generating productive employment, which is at the core of poverty reduction. JEL codes: E24, O14, O4

This article describes the dynamics of the structural transformation of the Thai economy, labor migration and direct foreign investment and proposes an econometric model to explain the migration phenomenon. Though migration shifts have been significantly influenced by political factors such as the Gulf crisis and tensions with Saudi Arabia, economic factors such as the Thai government's liberalization of markets and the expansion of trade and direct foreign investment have contributed to changes in labor market needs. The economic conditions for a shift from net exporter to net importer of labor are posited in the model. The empirical results reveal a turning point in labor migration from Thailand and also confirm the contribution of commodity export in place of labor export in creating employment and income.

This paper explores the effects of labour movement into nonfarm activities on household production choices in rural Vietnam. It finds that agricultural production declines and there are negative effects on farm revenue. However, these conclusions are limited in the north. Households in the north readjust their production structure by investing in livestock and other crops that require less labour. Rice farmers in the south have managed to keep their rice production unaffected by hiring more labour, and investing more capital to switch to less labour-intensive farming. The evidence of relaxing liquidity constraints is found, at least in the short run. While the decline in agricultural revenue in the north suggests some level of substitution between farming and nonfarm activities, the stability in rice production at the national level brings good news to policy makers and food security in Vietnam, despite rapid structural change over the past decades. Keywords Nonfarm, food security, rice self-sufficiency, agricultural transformation, household agricultural production References Akram-Lodhi, A.H., 2005. Vietnam’s agriculture: processes of rich peasant accumulation and mechanisms. Journal of Agrarian Change, 5(1), pp.73–116.Barrett, B., Reardon, T. and Webb, P., 2001. Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications. Food Policy, 26, pp. 315–331.Brennan, D. et al., 2012. Rural-urban migration and Vietnamese agriculture. In Contributed paper at the 56th AARES Annual Conference. Fremantle, Western Australia.Dang, KS., Nguyen, NQ., Pham, QD., Truong, TTT. and Beresford, M 2006. Policy reform and the transformation of Vietnamese agriculture, in Rapid growth of selected Asian economies: lessons and implications for agriculture and food security, Policy Assistance Series 1/3, FAO, Bangkok.De Brauw, A., 2010. Seasonal Migration and Agricultural Production in Vietnam. Journal of Development Studies, 46(1), pp.114–139.Glewwe, P., Dollar, D. and Agrawal, N., 1994. Economic growth, poverty, and household welfare in Vietnam, World Bank, Washington, DC.Haggblade, S., Hazell, P. and Reardon, T., 2007. Transforming the rural nonfarm economy. The Johns Hopkins University Press, Baltimore, Maryland.Hazell, P. and Rahman, A., 2014. New directions for smallholder agriculture 1st ed., Oxford University Press, New York.Hoang, T.X., Pham, C.S. and Ulubaşoǧlu, M., 2014. Non-farm activity, household expenditure, and poverty reduction in rural Vietnam: 2002-2008. World Development, 64, pp.554–568.Huang, J., Wang, X. and Qiu, H.G., 2012. Small-scale farmers in China in the face of modernization and globalization, International Institute for Environment and Development/HIVOS, London.Kajisa, K., 2007. Personal networks and non-agricultural employment: the case of a farming village in the Philippines. Economic Development and Cultural Change, 55(4), pp.668–707.Kilic, T, Carletto, C, Miluka, J. and Savastano, S., 2009. Rural nonfarm income and its impact on agriculture: Evidence from Albania. Agricultural Economics, 40(2), pp.139–60.Lanjouw, J. and Lanjouw, P., 2001. The rural non-farm sector: issues and evidence from developing countries. Agricultural Economics, 26, pp.1–23.Li, L., 2013. Migration, remittances, and agricultural productivity in small farming systems in Northwest China. China Agricultural Economic Review, 5(1), pp.5–23. Minot, N., 2006. Income diversification and poverty in the Northern Uplands of Vietnam, International Food Policy Research Institute, Washington, DC.Minot, N. and Goletti, F., 1998. Export liberalization and household welfare: the case of rice in Vietnam. American Journal of Agricultural Economics, 80(4), pp.738–749.Nguyen, H.Q., 2017. Analyzing the economies of crop diversification in rural Vietnam using an input distance function. Agricultural Systems, 157, pp. 148-156.Oseni, G. and Winters, P., 2009. Rural nonfarm activities and agricultural crop production in Nigeria. Agricultural Economics, 40(2), pp.189–201.Otsuka, K., Liu, Y. and Yamauchi, F., 2013. Factor endowments, wage growth, and changing food self-sufficiency: Evidence from country-level panel data. American Journal of Agricultural Economics, 95(5), pp. 1252–1258.Pham, VH, Nguyen, TMH, Kompas, T, Che, TN. and Bui, T., 2015. Rice production, trade and the poor: regional effects of rice export policy on households in Vietnam. Journal of Agricultural Economics, 66(2), pp. 280–307.Pingali, P.L., Xuan, V.T. and Khiem, N.T., 1998. Prospects for sustaining Vietnam’s re-acquired rice export status. Food Policy, 22(4), pp. 345–358.Rozelle, S., Taylor, J.E. and DeBrauw, A., 1999. Migration, remittances, and agricultural productivity in China. American Economic Review, 89(2), pp.287–291.Stampini, M. and Davis, B., 2009. Does non-agricultural labor relax farmers’ credit constraints? Evidence from longitudinal data for Vietnam. Agricultural Economics, 40(2), pp.177–188.Taylor, J.E. and Martin, P.L., 2001. Human capital: migration and rural population change. In G. Rausser & B. Gardner, eds. Handbook of Agricultural Economics, vol 1A. New York: Elsevier Science, pp. 457–511.Taylor, J.E., Rozelle, S. and De Brauw, A., 2003. Migration and incomes in source communities: a new economic of migration perspective from China. Economic Development and Cultural Change, 52(1), pp.75–101.Taylor, J.E. and Lybbert, T., 2015. Essentials of Development Economics, University of California Press, Berkeley.Thirwall, A.P., 2006. Growth and development with special reference to developing economies 8th ed., Palgrave Macmillan, New York.van de Walle, D. and Cratty, D., 2004. Is the emerging non-farm market economy the route out of poverty in Vietnam? Economics of Transition, 12(2), pp.237–274.Warr, P., 2009. Aggregate and sectoral productivity growth in Thailand and Indonesia, Working Papers in Trade and Development, 2009/10, Arndt-Corden Department of Economics, Australian National University.Warr, P., 2014. Food insecurity and its determinants. Australian Journal of Agricultural and Resource Economics, 58(4), pp. 519-37.Weiss, C.R., 1996. Exits from a declining sector: econometric evidence from a panel of upper-Austrian farms 1980-1990, Working Paper No. 9601, Department of Economics, University of Linz.Wiggins, S, Kirsten, J. and Llambí, L., 2010. The future of small farms. World Development, 38(10), pp. 1341–48.World Bank, 2006. Vietnam: business, Development Report No 34474-VN, Hanoi, Vietnam. KeywordsNonfarm, food security, rice self-sufficiency, agricultural transformation, household agricultural production References Akram-Lodhi, A.H., 2005. Vietnam’s agriculture: processes of rich peasant accumulation and mechanisms. Journal of Agrarian Change, 5(1), pp.73–116.Barrett, B., Reardon, T. and Webb, P., 2001. Nonfarm income diversification and household livelihood strategies in rural Africa: concepts, dynamics, and policy implications. Food Policy, 26, pp. 315–331.Brennan, D. et al., 2012. Rural-urban migration and Vietnamese agriculture. In Contributed paper at the 56th AARES Annual Conference. Fremantle, Western Australia.Dang, KS., Nguyen, NQ., Pham, QD., Truong, TTT. and Beresford, M 2006. Policy reform and the transformation of Vietnamese agriculture, in Rapid growth of selected Asian economies: lessons and implications for agriculture and food security, Policy Assistance Series 1/3, FAO, Bangkok.De Brauw, A., 2010. Seasonal Migration and Agricultural Production in Vietnam. Journal of Development Studies, 46(1), pp.114–139.Glewwe, P., Dollar, D. and Agrawal, N., 1994. Economic growth, poverty, and household welfare in Vietnam, World Bank, Washington, DC.Haggblade, S., Hazell, P. and Reardon, T., 2007. Transforming the rural nonfarm economy. The Johns Hopkins University Press, Baltimore, Maryland.Hazell, P. and Rahman, A., 2014. New directions for smallholder agriculture 1st ed., Oxford University Press, New York.Hoang, T.X., Pham, C.S. and Ulubaşoǧlu, M., 2014. Non-farm activity, household expenditure, and poverty reduction in rural Vietnam: 2002-2008. World Development, 64, pp.554–568.Huang, J., Wang, X. and Qiu, H.G., 2012. Small-scale farmers in China in the face of modernization and globalization, International Institute for Environment and Development/HIVOS, London.Kajisa, K., 2007. Personal networks and non-agricultural employment: the case of a farming village in the Philippines. Economic Development and Cultural Change, 55(4), pp.668–707.Kilic, T, Carletto, C, Miluka, J. and Savastano, S., 2009. Rural nonfarm income and its impact on agriculture: Evidence from Albania. Agricultural Economics, 40(2), pp.139–60.Lanjouw, J. and Lanjouw, P., 2001. The rural non-farm sector: issues and evidence from developing countries. Agricultural Economics, 26, pp.1–23.Li, L., 2013. Migration, remittances, and agricultural productivity in small farming systems in Northwest China. China Agricultural Economic Review, 5(1), pp.5–23. Minot, N., 2006. Income diversification and poverty in the Northern Uplands of Vietnam, International Food Policy Research Institute, Washington, DC.Minot, N. and Goletti, F., 1998. Export liberalization and household welfare: the case of rice in Vietnam. American Journal of Agricultural Economics, 80(4), pp.738–749.Nguyen, H.Q., 2017. Analyzing the economies of crop diversification in rural Vietnam using an input distance function. Agricultural Systems, 157, pp. 148-156.Oseni, G. and Winters, P., 2009. Rural nonfarm activities and agricultural crop production in Nigeria. Agricultural Economics, 40(2), pp.189–201.Otsuka, K., Liu, Y. and Yamauchi, F., 2013. Factor endowments, wage growth, and changing food self-sufficiency: Evidence from country-level panel data. American Journal of Agricultural Economics, 95(5), pp. 1252–1258.Pham, VH, Nguyen, TMH, Kompas, T, Che, TN. and Bui, T., 2015. Rice production, trade and the poor: regional effects of rice export policy on households in Vietnam. Journal of Agricultural Economics, 66(2), pp. 280–307.Pingali, P.L., Xuan, V.T. and Khiem, N.T., 1998. Prospects for sustaining Vietnam’s re-acquired rice export status. Food Policy, 22(4), pp. 345–358.Rozelle, S., Taylor, J.E. and DeBrauw, A., 1999. Migration, remittances, and agricultural productivity in China. American Economic Review, 89(2), pp.287–291.Stampini, M. and Davis, B., 2009. Does non-agricultural labor relax farmers’ credit constraints? Evidence from longitudinal data for Vietnam. Agricultural Economics, 40(2), pp.177–188.Taylor, J.E. and Martin, P.L., 2001. Human capital: migration and rural population change. In G. Rausser & B. Gardner, eds. Handbook of Agricultural Economics, vol 1A. New York: Elsevier Science, pp. 457–511.Taylor, J.E., Rozelle, S. and De Brauw, A., 2003. Migration and incomes in source communities: a new economic of migration perspective from China. Economic Development and Cultural Change, 52(1), pp.75–101.Taylor, J.E. and Lybbert, T., 2015. Essentials of Development Economics, University of California Press, Berkeley.Thirwall, A.P., 2006. Growth and development with special reference to developing economies 8th ed., Palgrave Macmillan, New York.van de Walle, D. and Cratty, D., 2004. Is the emerging non-farm market economy the route out of poverty in Vietnam? Economics of Transition, 12(2), pp.237–274.Warr, P., 2009. Aggregate and sectoral productivity growth in Thailand and Indonesia, Working Papers in Trade and Development, 2009/10, Arndt-Corden Department of Economics, Australian National University.Warr, P., 2014. Food insecurity and its determinants. Australian Journal of Agricultural and Resource Economics, 58(4), pp. 519-37.Weiss, C.R., 1996. Exits from a declining sector: econometric evidence from a panel of upper-Austrian farms 1980-1990, Working Paper No. 9601, Department of Economics, University of Linz.Wiggins, S, Kirsten, J. and Llambí, L., 2010. The future of small farms. World Development, 38(10), pp. 1341–48.World Bank, 2006. Vietnam: business, Development Report No 34474-VN, Hanoi, Vietnam.

This thesis analyses the impact of three different trade shocks on labour market outcomes and firms’ performance. The first chapter evaluates the impact of an increase in import competition on employment, gender employment gap and structural transformation in Ethiopia over the 1994-2013 period. In the second chapter, the objective is to investigate the changes in the Egyptian trade policies on wages and job stability, with a panel dataset covering a 20 years period (1998-2018); the last chapter examines the consequences of the Covid-19 pandemic on firms with different modes of internationalization, in terms of changes in sales and in business strategies. By exploiting three different very rich micro-level datasets, we study trade shocks under three different perspectives: a worker-level perspective, a firm-level perspective and a local labour market perspective. What emerges is that the impact of trade shocks is ultimately an empirical question, and that the direction of results greatly depends on the economic context under analysis. When trade liberalization is implemented in countries whose structural transformation process is still at an early stage, as in the Ethiopian case, this can harm rather than benefit their economies. On the other hand, the evidence in the third chapter suggests that being interconnected in the international market can help firms mitigating the shock, not only when the shock is domestic or idiosyncratic, but also, as in the case of Covid-19, when the it affects the whole global economy.

We study the role of multinationals (MNCs) in facilitating firm-level and aggregate structural transformation. Using a stylized model of multinational production and trade, we show that an inward multinational liberalization in the manufacturing sector raises employment in host country firms, and decreases manufacturing employment, while also raising services employment, in the parent firms. We also show the conditions under which aggregate structural transformation occurs. We test the models firm-level predictions by using confidential microdata from Japan. We study the response of Japanese MNC parents and their affiliates in China to an exogenous change in China's openness to foreign direct investment (FDI). We find that in industries where inward FDI was encouraged, Japan MNCs' affiliates in China experienced increases in their employment. We also find that MNC parents in the encouraged industries experienced decreases in home country manufacturing employment and increases in home country services and R&D employment. Finally, using microdata for several advanced and middle-income countries, we decompose the change in overall manufacturing employment shares into MNC and non-MNC components. We find a significant role for MNCs across all countries, suggesting the mechanism we highlight is an important global driver of structural transformation.