Measuring the impact of trade flows on employment in the Turkish manufacturing industry

This paper investigates the impact of export and import flows on the change in manufacturing employment using an accounting-identity based approach which enables the change in employment to be decomposed into the contribution made not only by trade but also by domestic consumption and productivity change. The analysis is carried over (i) four subperiods, two belonging to the period before 1980 when Turkey switched from a regime of import-substitution based growth to one of export-orientation, and the other two, to the period after 1980. and (ii) three trade-based categories; net exporting, import competing and noncompeting sectors. It is found (a) that trade has a more significant role to play in employment change in the post-1980 periods, (b) that this is observed more in the net exporting and noncompeting categories rather than the import competing category, and (c) that the switch to export-oriented growth in 1980 did not lead to export-based employment to be dominant in employment changes but has acted as a buffer in the sense that employment may either have grown much less or declined more severely if the post-1980 expansion of exports had not occurred.