Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/172202 
Year of Publication: 
2017
Series/Report no.: 
WTO Staff Working Paper No. ERSD-2017-15
Publisher: 
World Trade Organization (WTO), Geneva
Abstract: 
Trade and technological change continually alter the workplace and labor-market outcomes, with consequences for economy-wide welfare and the distribution of real incomes. This report assesses the state of economic research into those areas, with a particular focus on empirical methodologies and their adequacy for an assessment of general-equilibrium outcomes. While difference-in-differences techniques and instrumental- variable approaches provide answers, they exhibit shortcomings that limit conclusiveness. Recent advances in structural estimation of multi-country and multisector models that allow for reallocation frictions in domestic labor markets hold promise to deliver more definite empirical answers. Interestingly, a conclusion from a two-decades old strand of literature seems to be vindicated by conclusions from a related recent literature: roughly one-quarter of changes in labor-market outcomes (wage inequality then and manufacturing job losses now) was predicted by trade integration and roughly one-third by technological change. The remainder of changes in labor-market outcomes remains unaccounted. The report offers candidate explanations, rooted in recent evidence, how interactions between globalization, technological progress, and structural change may account for that remainder.
Subjects: 
trade
current account balance
automation
choice of technology
industrial structure and structural change
labor-market outcomes
employment
jobs
wages
inequality
JEL: 
F16
F32
J23
J24
L16
O14
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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