A Study On The Effects Of Sino-US Intra-industry Trade On Labor Market Costs

Intra-industry trade has been accounting for quite an important position in world trade since1970s last century. It has become a major force driving the development of a new type international division of labor, accelerating the development of emerging and dominant industries. In recent years, along with the development of global trade liberalization as well as China’s economy maintained rapid growth, the commodity structure of China’s foreign trade has changed greatly. At the same time, the per capita income levels increase the trend of enhanced diversification of consumer demand and foreign direct investment continues to expand vigorously promote the development of intra industry trade in China. The role of intra industry trade in China’s foreign trade continue to improve.China’s accession to the WTO, the impact of foreign trade have deepened and foreign trade become an important force in promoting economic growth in China. Some phenomenon such as "recruitment difficulties","wage gap had widened" have happened in labor market in China, these are closely related with China’s foreign trade situation. The relationship between trade and labor market costs has become a hot topic of current research. Sino-US trade has a very important position in China’s foreign trade. In2010, China and the United States are each other’s second largest trading partner. Study the impact of Sino-US intra-industry trade of China’s Labor market costs not only has academic significance, also has important reference value to the real sector decisions.In the study of the impact of intra industry trade on the labor market costs, this dissertation is based intra-industry trade theory, tightly around the two key variables to analyze the labor market, respectively, cost variables and the wage variable.In the study of the impact of intra industry trade on the employment adjustment costs in labor market, the main theoretical basis is the "smooth adjustment hypothesis ".This hypothesis proposed that adjustment costs and the degree of intra-industry trade are closely related, the higher the level of intra-industry trade, the lower the adjustment costs of trade. The hypothesis provides the ideas for our analysis of Sino-US trade adjustment costs. In this paper, empirical model has been used to calculate the marginal intra-industry Trade Index between China and the United States. This dissertation analyzes the relationship between employment adjustment costs and the Sino-US intra-industry trade. This dissertation obtained conclusion that the higher the degree of intra-industry trade, the smaller the of the trade adjustment costs and proved the applicability of the "smooth adjustment hypothesis in China. On this basis, the labor force adjustment costs of the main industry are estimated.In analyzing the effects of intra-industry trade for labor wages, with the help of a theoretical model of the existing intra-industry trade and wage gap, the dissertation constructs a quantitative analysis model of intra industry trade within the Sino-US manufacturing industry and the wage premium and estimates the relationship between the intra-industry trade and industry wage gap. The results show that the level of intra industry trade index and the wages of workers in the manufacturing industry between China and the United States have a positive significant relationship. In promoting the industry wage level, role based on intra-industry trade is much larger than the inter-industry trade.Empirical findings based on the impact of Sino-US intra-industry trade on labor market, the policy recommendations include the following:Adhering to the expansion of opening up, at the same time,we must take various measures to improve labor market conditions.We must make the adjustment of industrial structure and trade structure, the emphasis on workers’job skills training to reduce the impact arising from employment of intra-industry trade adjustment costs on the labor market; We should increase R&D investment, to adjust the policy to attract foreign investment, contribute to the optimization and upgrading of processing trade to enhance the size and quality of intra-industry trade, increase the wages of workers.Compared with the existing literature, this study may have achieved the following innovations:First of all, better robustness examined the "smooth adjustment hypothesis", the multi-angle estimated employment adjustment costs;Domestic scholars in the use of "smooth adjustment hypothesis" on the Chinese intra industry trade does not demonstrate that the applicability of the hypothesis in China; Some domestic scholars use single indicators to calculate and can not objectively reflect the scale of the marginal intra-industry trade. Second, this dissertation use panel data model to analyze the impact of intra-industry trade on wages. The domestic results mainly from the general trade study on the impact of trade and income distribution; Finally, this dissertation analyzes the impact of intra-industry trade on employment adjustment costs and wage. Existing research is the lack of full discussion of this transmission mechanism. Due to the conditions and restrictions on the level, there are shortcomings:Difficult to collect the data of the micro-level, the dissertation only use industry data; when I use intra-industry trade to analyze the labor market, systematic theory is lack.The dissertation is composed of8chapters:Chapter1,Introduction. This chapter describes the background and significance of the topics and describes the structural arrangement and the main research methods. It is also noted that the main method of this study and innovation and inadequacies..Chapter2, Basic theory and measure of intra-industry trade. This chapter first defines the concept of intra-industry trade, introduced the basic theory of intra-industry trade. And then on the basis of comprehensive assessment of the measure method of intra-industry trade and criteria of the classification of intra-industry trade, This chapter pointed out a specific measure of intra-industry trade study selected in this article methods and criteria for the classification of intra-industry trade. Finally, this chapter introduces the concept of "smooth adjustment hypothesis" and relates to calculation of marginal intra-industry trade.Chapter3, The impact mechanism of intra-industry trade for labor costs. This chapter analyzed from two aspects. The one hand, the development of international trade will affect the flow of the various departments of production factors.If demand and supply changes, the labor market is not clearing. This will lead to a temporary low efficiency. Employment adjustment costs occurs. There is a certain relationship between adjustment cost and level of intra-industry trade. On the other hand, intra-industry trade will affect the workers’wages. This chapter draw on the research of scholars to analyze the mechanism of intra-industry trade affect labor costs.Chapter4, Volume and structure of the Sino-US intra-industry trade. Analyzing the scale of development and commodity structure of the Sino-US trade, this chapter found that since China’s accession to the WTO Sino-US trade in manufactured goods has become a major component of the Sino-US trade.Based comparative analysis of Sino-US horizontal and vertical intra-industry trade, this chapter found that the Sino-US intra-industry trade is a low level of vertical industry trade. By analyzing intra-industry trade of Sino-US major import and export commodities, found that the vertical extent of the export goods is higher than imported goods.Chapter5, Effects of Sino-US intra-industry trade on employment adjustment costs. This chapter has conducted in-depth analysis of employment adjustment costs caused by trade and introduced Balassa "smooth adjustment hypothesis and the empirical research. This chapter in-depth analyzes the concept of marginal intra-industry trade index and its calculation method. On this basis, this chapter calculate the marginal intra-industry trade index including A Index B Index and the S index between China and the United States. The chapter uses panel data method to analyze the relationship between employment adjustment costs and marginal intra-industry trade and concludes that the higher the degree of intra-industry trade, the lower the cost of employment adjustment conclusions and proves the applicability of the "smooth adjustment hypothesis in China.Chapter6, Effects of Sino-US intra-industry trade on wage costs With the help of a theoretical model of the existing intra-industry trade and wage gap, the dissertation constructs a quantitative analysis model of intra industry trade within the Sino-US manufacturing industry and the wage premium and estimates the relationship between the intra-industry trade and industry wage gap. The results show that the level of intra industry trade index and the wages of workers in the manufacturing industry between China and the United States have a positive significant relationship. Role in promoting the industry wage levels based on intra-industry trade is much larger than the inter-industry trade.Chapter7, Conclusions and policy recommendations. This chapter summarizes the main conclusions and policy recommendations of the full text.