This staff research paper investigates the nature of the relationship between import competition and manufacturing sector employment within Australia.
Manufacturing employment in Australia has been on a long-run declining trend over the past four decades. It is a widely held view that import competition, especially from low wage countries, is an important factor driving this trend.
The research finds that low-wage countries have significantly increased their collective share of Australia’s imports of manufactured goods.
The results also indicate:
- manufactured imports have a statistically significant negative relationship with manufacturing employment
- exports have the opposite effect
- trade's role in employment determination has waned over time
Author: Razib Tuhin