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

49 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

Technological progress and trade potentially affect wages and employment. Technological progress can make jobs obsolete and trade can increase unemployment in import competing sectors. Empirical evidence suggests that both causes are important to explain recent labour market developments in many OECD countries. Both causes are often mentioned in tandem, but the relative contribution of each cause is less clear. This study presents a meta-analysis to shed light on the relative contribution of technological progress and trade in recent labour market developments and allows us to identify the winners and losers of automation and globalization. Using a sample of 77 studies and 1158 estimates, we find that both effects are important. Automation is beneficial at the firm level, and is more likely to displace low-skilled employment. Trade is more likely to benefit high-skilled employment and affects industry negatively. Somewhat surprisingly, given the consensus in the literature, automation has a positive effect for estimates considering the period before 1995, and trade a negative effect. We also find some evidence of publication biases.

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

JEL Classification: F230, J310, J630, 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

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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