International Trade and Job Polarization: Evidence at the Worker-Level

Wolfgang Keller and Hale Utar

No 22315, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the role of international trade for job polarization– the decline in opportunities for mid-wage workers while those for high- and low-wage workers increase. With employer-employee matched data on virtually all workers and firms in Denmark between 1999 and 2009, we show that import competition has caused worker-level adjustments that lead to job polarization. When mid-wage workers adjust to the shock, highly educated and skilled workers end up in high-wage jobs whereas less educated workers end up in low-wage positions. We show that the specific tasks performed by a worker are central in determining trade’s impact, and workers performing manual tasks are the ones most affected regardless of how routine or non-routine these tasks are. Trade lets foreign workers compete against domestic workers, in contrast to technical progress which pits man versus machine country by country. Quantitatively, we find that job polarization through trade-induced worker adjustments is at least as strong as through technical change and offshoring.

JEL-codes: F16 I24 J21 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-int and nep-lma
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Citations: View citations in EconPapers (60)

Published as Wolfgang Keller & Hale Utar, 2023. "International trade and job polarization: Evidence at the worker level," Journal of International Economics, .

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Related works:
Journal Article: International trade and job polarization: Evidence at the worker level (2023)
Working Paper: International Trade and Job Polarization: Evidence at the Worker Level (2023)
Working Paper: International Trade and Job Polarization: Evidence at the Worker Level (2016)
Working Paper: International Trade and Job Polarization: Evidence at the Worker-Level (2016)
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