International Trade and Job Polarization: Evidence at the Worker-Level / Wolfgang Keller, Hâle Utar.

Format:

Book

Author/Creator:

Keller, Wolfgang.

Contributor:

National Bureau of Economic Research.

Utar, Hâle.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22315.

NBER working paper series no. w22315

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

International Trade and Job Polarization

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

This paper examines the role of international trade for job polarization- the decline in opportunities for mid-wage workers while those for high- and low-wage workers increase. With employer-employee matched data on virtually all workers and firms in Denmark between 1999 and 2009, we show that import competition has caused worker-level adjustments that lead to job polarization. When mid-wage workers adjust to the shock, highly educated and skilled workers end up in high-wage jobs whereas less educated workers end up in low-wage positions. We show that the specific tasks performed by a worker are central in determining trade's impact, and workers performing manual tasks are the ones most affected regardless of how routine or non-routine these tasks are. Trade lets foreign workers compete against domestic workers, in contrast to technical progress which pits man versus machine country by country. Quantitatively, we find that job polarization through trade-induced worker adjustments is at least as strong as through technical change and offshoring.

Notes:

Print version record

June 2016.