Author(s)

Hao Wei, Qiang Fu, Sui Yang

School of Economics and Business Administration, Beijing Normal University, Beijing, China.

This paper analyses the impact of services trade on the labor-demand elasticities of service sector with the data of China from 1982 to 2009.we find that: 1) First, no matter in the long run or in the short term, China’s services export distinctly impacts on the labor-demand elasticities of service sector. In the long-term influence, the substitution effect is much more powerful than the output effect, however, as to the short period, the output effect is a little stronger than the substitution effect; 2) Second, in the long run, we cannot reject the hypothesis of no relationship between service import openness and the labor-demand elasticities of service sector. Whereas, studying the result of the short term, trade liberalization of services import does affect the service sector labor-demand elasticity weakly.

Trade Liberalization; Labor-Demand Elasticities; Service Sector; Substitution Effect; Output Effect

H. Wei, Q. Fu and S. Yang, "Services Trade and Labor-Demand Elasticities of Service Sector: Empirical Evidence from China," American Journal of Industrial and Business Management, Vol. 2 No. 4, 2012, pp. 136-144. doi: 10.4236/ajibm.2012.24018.