Trade and Employment : Stylized Facts and Research Findings
The substantial literature investigating the links between trade, trade policy, and labor market outcomes-both returns to labor and employment-has generated a number of stylized facts, but many open questions remain. This paper surveys the subset of the literature focusing on trade policy and integration into the world economy. Although in the longer run trade opportunities can have a major impact in creating more productive and higher paying jobs, this literature tends to take employment as given. A common finding is that much of the shorter run impacts of trade and reforms involve reallocation of labor or wage impacts within sectors. This reflects a pattern of expansion of more productive firms-especially export-oriented or suppliers to exporters-and contraction and adjustment of less productive enterprises in sectors that become subject to greater import competition. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in both industrial and developing countries in recent decades. A feature of the literature survey is that the focus is almost exclusively on industries producing goods. Given the importance of service industries as a source of employment and determinants of competitiveness, the paper argues that one priority area for future research is to study the employment effects of services trade and investment reforms.
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ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS |
| spellingShingle |
ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS Hoekman, Bernard Winters, L. Alan Trade and Employment : Stylized Facts and Research Findings |
| description |
The substantial literature investigating the links between trade, trade policy, and labor market outcomes-both returns to labor and employment-has generated a number of stylized facts, but many open questions remain. This paper surveys the subset of the literature focusing on trade policy and integration into the world economy. Although in the longer run trade opportunities can have a major impact in creating more productive and higher paying jobs, this literature tends to take employment as given. A common finding is that much of the shorter run impacts of trade and reforms involve reallocation of labor or wage impacts within sectors. This reflects a pattern of expansion of more productive firms-especially export-oriented or suppliers to exporters-and contraction and adjustment of less productive enterprises in sectors that become subject to greater import competition. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in both industrial and developing countries in recent decades. A feature of the literature survey is that the focus is almost exclusively on industries producing goods. Given the importance of service industries as a source of employment and determinants of competitiveness, the paper argues that one priority area for future research is to study the employment effects of services trade and investment reforms. |
| format |
Publications & Research |
| topic_facet |
ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS |
| author |
Hoekman, Bernard Winters, L. Alan |
| author_facet |
Hoekman, Bernard Winters, L. Alan |
| author_sort |
Hoekman, Bernard |
| title |
Trade and Employment : Stylized Facts and Research Findings |
| title_short |
Trade and Employment : Stylized Facts and Research Findings |
| title_full |
Trade and Employment : Stylized Facts and Research Findings |
| title_fullStr |
Trade and Employment : Stylized Facts and Research Findings |
| title_full_unstemmed |
Trade and Employment : Stylized Facts and Research Findings |
| title_sort |
trade and employment : stylized facts and research findings |
| publisher |
World Bank, Washington, DC |
| publishDate |
2005-08 |
| url |
http://documents.worldbank.org/curated/en/2005/08/6180806/trade-employment-stylized-facts-research-findings http://hdl.handle.net/10986/8624 |
| work_keys_str_mv |
AT hoekmanbernard tradeandemploymentstylizedfactsandresearchfindings AT winterslalan tradeandemploymentstylizedfactsandresearchfindings |
| _version_ |
1756572085561327616 |
| spelling |
dig-okr-1098686242021-04-23T14:02:43Z Trade and Employment : Stylized Facts and Research Findings Hoekman, Bernard Winters, L. Alan ABSORPTIVE CAPACITY AGGREGATE TRADE AGRICULTURE ASSETS BENCHMARK BUSINESS CYCLE CAPITAL GOODS CAPITAL MOBILITY CENTRAL BANK CHANGES IN TRADE COMPARATIVE ADVANTAGE COMPETITIVE EFFECTS OF TRADE COMPETITIVENESS CURRENCY CURRENT ACCOUNT DEMAND ELASTICITIES DEMAND SHOCKS DEPRECIATION DEREGULATION DEVELOPED COUNTRIES DOMESTIC DEMAND ECONOMETRIC ANALYSES ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMICS LITERATURE EFFICIENCY WAGES ELASTICITIES ELASTICITY ELASTICITY OF DEMAND EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL STUDIES EMPLOYMENT EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT SECTORS EXPORTERS EXPORTS FACTOR ENDOWMENTS FACTOR MARKETS FACTOR PRICE FACTOR PRICE EQUALIZATION FACTORS OF PRODUCTION FISCAL POLICY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN MARKETS FOREIGN TECHNOLOGIES FREE TRADE FREE TRADE IN GOODS FULL EMPLOYMENT FUTURE RESEARCH GDP GENERAL EQUILIBRIUM ANALYSIS GROWTH RATE HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT COMPETITION IMPORT PENETRATION IMPORTS INCOME INCOME DISTRIBUTION INCOME LEVELS INDUSTRY TRADE INEFFICIENCY INTEREST RATES INTERNATIONAL MARKETS INTERNATIONAL TRADE LABOR FORCE LABOR MARKET OUTCOMES LABOR MARKETS MACROECONOMIC POLICY MARGINAL PRODUCT MARGINAL PROPENSITY TO IMPORT MEASURE OF TRADE MINIMUM WAGE MINIMUM WAGES MONEY SUPPLY MONOPOLISTIC COMPETITION MULTIPLIER EFFECT MULTIPLIER EFFECTS NATURAL RATE OF UNEMPLOYMENT NEOCLASSICAL MODELS OPEN ECONOMIES POLITICAL ECONOMY PRICE CHANGES PRIVATIZATION PRODUCERS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PRODUCTIVITY PRODUCTIVITY GROWTH QUOTAS REAL EXCHANGE RATE REAL EXCHANGE RATE CHANGES REAL WAGES REDUCTION IN TARIFFS RELATIVE PRICE OF GOODS STRUCTURAL CHANGE SURPLUS LABOR TARIFF LEVELS TARIFF REDUCTIONS TECHNOLOGICAL PROGRESS TERMS OF TRADE TIME SERIES TRADABLE GOODS TRADE INTEGRATION TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADE MODELS TRADE MORE TRADE OPENNESS TRADE POLICIES TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIME TRADE REGIMES TRADE SHOCKS TRADE VOLUMES UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS WAGE INEQUALITY WAGE RATES WAGE RIGIDITIES WAGES WORLD MARKETS The substantial literature investigating the links between trade, trade policy, and labor market outcomes-both returns to labor and employment-has generated a number of stylized facts, but many open questions remain. This paper surveys the subset of the literature focusing on trade policy and integration into the world economy. Although in the longer run trade opportunities can have a major impact in creating more productive and higher paying jobs, this literature tends to take employment as given. A common finding is that much of the shorter run impacts of trade and reforms involve reallocation of labor or wage impacts within sectors. This reflects a pattern of expansion of more productive firms-especially export-oriented or suppliers to exporters-and contraction and adjustment of less productive enterprises in sectors that become subject to greater import competition. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in both industrial and developing countries in recent decades. A feature of the literature survey is that the focus is almost exclusively on industries producing goods. Given the importance of service industries as a source of employment and determinants of competitiveness, the paper argues that one priority area for future research is to study the employment effects of services trade and investment reforms. 2012-06-21T14:26:20Z 2012-06-21T14:26:20Z 2005-08 http://documents.worldbank.org/curated/en/2005/08/6180806/trade-employment-stylized-facts-research-findings http://hdl.handle.net/10986/8624 English Policy Research Working Paper; No. 3676 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |