Trade and Labour Market Outcomes in Germany

Abstract

The German economy is characterized by a high degree of foreign exposure through exports and imports. This paper considers the link between trade and labour market outcomes in Germany. To that end we combine individual-level data from the German Socio Economic Panel for the period 1999 to 2007 with industry-level data on various aspects of trade – exports, imports and offshoring. We consider their effects on wages and the probability of moving into unemployment. Our econometric analysis suggests that there is little impact of trade-related variables on individual-level wages, whereas there appears to be some impact with respect to employment. We find some important differences between manufacturing and services sectors, in particular with regard to exporting and offshoring.trade, employment, inclusive growth, wages

An Analysis of German Economic Prosperity at the Beginning of the 21st Century

“…At the same time, the German economy is characterized by a high degree of exposure to foreign countries through exports and imports. [12] In response to the rigidity of the domestic economy and expectations of declining domestic demand, Germany focused on exports to emerging markets earlier than most other countries. The fact that more production chains are located abroad has further increased Germany's competitiveness.…”