Perceived trade policy uncertainty and firms’ labour demand: evidence from online job postings

Using data on Chinese A-share listed firms from 2016 to 2024, this study constructs a firm-level measure of perceived trade policy uncertainty (PTPU) with a bidirectional encoder representations from transformers (BERT) model and examines its impact on firms’ labor demand using online job postings. The results show that PTPU significantly reduces firms’ overall hiring and their demand for workers with higher qualifications in terms of education, work experience, and professional skills. Further evidence suggests that PTPU reduces labor demand by raising the value of waiting before making employment commitments and increasing firms’ risk aversion. Heterogeneity analysis shows that the effect on hiring scale is stronger among technology-intensive firms and financially constrained firms, while the negative effects on both hiring scale and high-standard job demand are more pronounced among non-state-owned enterprises. This study extends research on the microeconomic consequences of trade policy uncertainty from the perspective of firms’ subjective perceptions and reveals firms’ defensive human capital allocation strategies in response to uncertainty.