Labor Market Effects of Outward Direct Investment and Trade: Evidence from Taiwan
Date Issued
2015
Date
2015
Author(s)
Chen, Yen-Chen
Abstract
This study aims to analyze the impact of Taiwan''s investment in and trade with China on Taiwan''s labor market between 1998 and 2010. This project involves expanding a small open economy model to one that includes the impact of outward direct investment and trade. By testing model''s predictions on the merged Taiwanese individual-level and industry-level datasets, we find empirical evidence suggesting that outward investment in China places downward pressure on unskilled laborer''s real wage levels. In addition, we discover that this outward investment increases the unemployment rate of unskilled laborers while lowering that of skilled laborers. In contrast to the results of outward investment, trade with China raises unskilled laborer''s wage levels, thereby contributing to the shrinking of the skill premium. Trade also decreases the unemployment rate of unskilled laborers at the cost of increasing the unemployment rate for skilled laborers.
Subjects
outward direct investment
trade
unemployment
wage
labor market
SDGs
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-104-R01323014-1.pdf
Size
23.54 KB
Format
Adobe PDF
Checksum
(MD5):025d911881c8478912989c85c7b05972