The Effects of Foreign Trade on Labor Earnings in Iranian Manufacturing Industries: New Evidence from New Trade Theories

Document Type : Scientific paper

Authors

1 Professor at Economics Department, Faculty of Economics and Administrative Sciences, Babolsar, Iran

2 Department of Economics and Administrative sciences, University of Mazandaran

Abstract


The present research investigates the effects of foreign trade on the labor earnings in Iranian manufacturing industries at the three-digit aggregation level of ISIC classification over the period 2009-2013. For this purpose, relative total earnings, wages, and fringe benefits used as dependent variables and inter industry trade, intra-industry trade (IIT) in its' details (vertical and horizontal), human capital, capital intensity, total factor productivity and dependent variable with one lag used as explanatory variables in the models. By using of GMM two-step method, the results indicate that there is a positive path-dependency between the current and lagged values of dependent variables. The results also show positive and significant effects of inter industry trade on the labor earnings, still, these effects are more effective on fringe benefits than wages. On the other hand, intra-industry trades have a depressing effect on the labor earnings. Finally, increasing in the human capital, capital intensity, and total factor productivity is associated with more labor earnings in Iranian manufacturing industries.

Keywords

References

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Macroeconomics Research Letter
Volume 14, Issue 27
November 2019
Pages 41-64

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History

  • Receive Date: 07 April 2018
  • Revise Date: 14 November 2018
  • Accept Date: 11 March 2019

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