Labour Markets, Trade and Technological Progress: A Meta-Study

136 Pages Posted: 23 Jul 2019

See all articles by Nikos Terzidis

Nikos Terzidis

University of Groningen - Faculty of Economics and Business

Steven Brakman

University of Groningen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Raquel Ortega-Argilés

University of Birmingham - Birmingham Business School, City REDI institute ; University of Groningen - Faculty of Economics and Business

Date Written: 2019

Abstract

Theoretical models, supported by empirical evidence, suggest that technological progress and trade are two essential factors to explain recent labor market developments in many OECD countries; technology can make jobs obsolete, and import competition can drive firms out of business. Both causes are often mentioned in tandem, but their relative contribution is unclear. This meta-analysis disentangles the interplay between technology and trade regarding recent labor market developments. Using a sample of some 623 technology and 1094 trade elasticities from 91 studies, our meta-analysis first reveals that despite small publication selection, technology and trade benefit both wages and employment in a statistically significant and economically meaningful way. Nevertheless, the multivariate meta-regression analysis indicates that this conclusion is conditional on several research dimensions. In the most prominent outcome, we document that the skill-bias impact from technology is concentrated on employment, where high-skilled workers benefit relatively more compared to low-skilled ones. In contrast, trade effects expand over both wages and employment, but mainly benefit high-skilled workers. Taken together, the current analysis sheds light into how globalization favors especially high-skilled workers in industrialized labor markets.

Keywords: labour markets, technological progress, trade, meta-study

JEL Classification: F160, J310, O110

Suggested Citation

Terzidis, Nikos and Brakman, Steven and Ortega-Argilés, Raquel, Labour Markets, Trade and Technological Progress: A Meta-Study (2019). CESifo Working Paper No. 7719, Available at SSRN: https://ssrn.com/abstract=3421146 or http://dx.doi.org/10.2139/ssrn.3421146

Nikos Terzidis (Contact Author)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Steven Brakman

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 3746 (Phone)
+31 50 363 3730 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Raquel Ortega-Argilés

University of Birmingham - Birmingham Business School, City REDI institute ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

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