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Globalization, International Fragmentation and the Labour Input for German Exports An Input-Output Analysis WIOD Conference 26-28 May 2010 in Vienn a. Questions to be answered. How have German export and its import content developed over the past decades?
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Globalization, International Fragmentation and the Labour Input for German Exports An Input-Output Analysis WIOD Conference 26-28 May 2010 in Vienna
Questions to be answered • How have German export and its import content developed over the past decades? • How does the growth in exports impact employment and income compared to its loss as a result of increased import penetration? • Which employee skills levels are impacted more than average by the import penetration of export production?
The Method Standard Open Input-Output-Model where: Export-Induced Imports where:
German Exports and their Import Content in the period from 1980 until 2006a - at current prices - aThe figures for the years 1980 and 1985 refer to the Federal Republic of Germany before reunification. Source: Federal Statistical Office of Germany: Input-Output-Tables; authors` calculations.
At first glance the import content of German exports increased in the 1990’s to almost 40%. • Behind this growth a strong change in the composition of German exports is hidden in favour of re-exports. • The rate of re-exports in the total import content of exports quadrupled from 4% in 1980 to 16% in 2006 whereas the rate of export-induced intermediate imports increased from 20% to 26%. The strongest change was observed in the second half of the 1990’s. • At second glance the import penetration of German export goods produced domestically also enhanced but less dramatically. It started from 22% of the exports in the 1980’s and reached almost 30% at the end of the 1990’s.
Composition of German Exports - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.
Composition of Export-Induced Imports - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.
Share of Export-Induced Imports in Exports Sources: Federal Statistical Office Germany; IWH calculations.
Share of Export-Induced Imports in Total Exports and in Domestic Export Goods Sources: Federal Statistical Office Germany; IWH calculations.
Stylized Development of the Share of Export-Induced Imports in German Exports Sources: Federal Statistical Office Germany; IWH calculations.
Effects of exports on production of goods and use of income Production phase: Effects of exports on value added and employment where:
Income use phase: Effects of income induced by exports where:
Net Contribution of Domestic Export Goods to Value Added - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.
Net Employment Effects of Domestic Export Goods - in thousand persons - Sources: Federal Statistical Office Germany; IWH calculations.
Balance of Effects on Gross value added and Employment induced by Exports and imported intermediate Goods by main economic sectors in Germany - in % - Sources: Federal Statistical Office Germany; IWH calculations.
Extension of German IOTs by Skills • Method: split of employment input by skills levels • Source: households surveys (microcensus): 5 skills levels, 71 industries, 300 occupations, 3 groups of working time, gender • Sample: 1 % per year
Balance of Employment Effects of export induced Production and imported intermediate Goods by main economic sectors and skill levels in Germany: Changes between 1996 and 2006 - 1 000 persons - Sources: Federal Statistical Office Germany; IWH calculations.
Employment Effects of export induced Production and imported intermediate Goods per 1 million Euro of Exports by main economic sectors and skill levels: Changes in Germany between 1996 and 2006 - in persons - Sources: Federal Statistical Office Germany; IWH calculations.
Conclusions • Positive balance between gains due to growing exports and the losses caused by increasing import content of the exports. • Production of export goods outdoes the labour intensity of export induced imports. • There is a positive balance in skill content between exports produced domestically and export induced imports.