Are Automation and Trade Polarizing Developing Country Labor Markets, Too?

30 Pages Posted: 20 Dec 2016

See all articles by William F. Maloney

William F. Maloney

World Bank - Poverty and Economic Management Unit; IZA Institute of Labor Economics; World Bank - Development Research Group (DECRG)

Carlos Molina

Universidad de los Andes, Colombia - Department of Economics

Date Written: December 19, 2016

Abstract

The automation and out-sourcing of routine, codifiable tasks are seen as driving polarization in labor markets in high-income countries. This paper first offers several explanations for why developing countries might show differing dynamics, at least for the present. Census data then confirms this, showing on average no evidence of polarization in developing countries. However, incipient polarization in a few countries as well as major drives to automate in some large, labor intensive producers suggests this may not remain the case. This raises concerns first about the impact on equity within those countries, but second the possibility that the traditional flying geese pattern "-- whereby low skilled jobs are progressively off-shored to poorer and poorer countries -- may be short circuited.

Keywords: Achieving Shared Growth, Globalization and Financial Integration, Employment and Shared Growth, Economic Theory & Research, Economic Growth, Industrial Economics, International Trade and Trade Rules, Pro-Poor Growth, Equity and Development

Suggested Citation

Maloney, William F. and Molina, Carlos, Are Automation and Trade Polarizing Developing Country Labor Markets, Too? (December 19, 2016). World Bank Policy Research Working Paper No. 7922. Available at SSRN: https://ssrn.com/abstract=2887777

William F. Maloney (Contact Author)

World Bank - Poverty and Economic Management Unit ( email )

1818 H Street NW
Washington, DC 20433
United States
202-473-6340 (Phone)
202-522-0054 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Carlos Molina

Universidad de los Andes, Colombia - Department of Economics ( email )

Carrera 1a No. 18A-10
Santafe de Bogota, AA4976
Colombia

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