Unlike in the case of the US, rising trade with emerging low-wage countries did not speed up the decline of manufacturing in Germany. Trade, in fact, slowed it down because the rising exports to these new markets worked to stabilize industry jobs, which might have otherwise been replaced by service jobs.
A new IZA Discussion Paper by Wolfgang Dauth, Sebastian Findeisen and Jens Suedekum focuses on this topic in the context of Germany, whose economy has a traditional focus on manufacturing and runs an overall current account surplus with relatively even trade balances with China and emerging economies in Eastern Europe. The study investigates broad sectoral employment trends between 1993 and 2014, the underlying labor transitions at the micro-level that were behind broader aggregate trends, and how this micro anatomy of structural change was affected by globalization.
Chosen excerpts by Job Market Monitor. Read the whole story at Globalization’s stabilizing effect on manufacturing jobs in Germany | IZA Newsroom