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Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Globalization, International Fragmentation and the Labour Input for German.

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Presentation on theme: "Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Globalization, International Fragmentation and the Labour Input for German."— Presentation transcript:

1 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Globalization, International Fragmentation and the Labour Input for German Exports An Input-Output Analysis WIOD Conference 26-28 May 2010 in Vienna

2 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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?

3 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Standard Open Input-Output-Model The Method where: Export-Induced Imports where:

4 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch German Exports and their Import Content in the period from 1980 until 2006 a - at current prices - a The 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.

5 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch At first glance the import content of German exports increased in the 1990s 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 1990s. 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 1980s and reached almost 30% at the end of the 1990s.

6 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Composition of German Exports - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.

7 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Composition of Export-Induced Imports - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.

8 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Share of Export-Induced Imports in Exports Sources: Federal Statistical Office Germany; IWH calculations.

9 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Share of Export-Induced Imports in Total Exports and in Domestic Export Goods Sources: Federal Statistical Office Germany; IWH calculations.

10 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Stylized Development of the Share of Export-Induced Imports in German Exports Sources: Federal Statistical Office Germany; IWH calculations.

11 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch where: Production phase: Effects of exports on value added and employment Effects of exports on production of goods and use of income

12 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch where: Income use phase: Effects of income induced by exports

13 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Net Contribution of Domestic Export Goods to Value Added - in billion Euro - Sources: Federal Statistical Office Germany; IWH calculations.

14 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Net Employment Effects of Domestic Export Goods - in thousand persons - Sources: Federal Statistical Office Germany; IWH calculations.

15 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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.

16 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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

17 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch Skill Levels

18 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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.

19 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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.

20 Institut für Wirtschaftsforschung Halle Prof. Udo Ludwig, Dr. Ulrich Brautzsch 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.


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