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

Wolfgang Keller and Hale Utar

No 11311, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines the role of international trade for job polarization, where mid-wage occupations decline while employment opportunities of workers in both high- and low-wage occupations increase. With employer-employee matched data on virtually all workers and firms in Denmark between 1999 and 2009, we use instrumental-variables techniques and a quasi-natural trade liberalization experiment to show that import competition has been a significant cause of job polarization. Comparing import competition to other explanations of job polarization, import competition is quantitatively comparable to technical change as the most important alternative explanation of the hollowing out of middle-class jobs, and only import competition explains also the increase in employment opportunities in the high- and low-wage tails. Worker movement from exposed middle-class jobs up into high-wage or down into low-wage jobs is shaped by worker education and skill, and especially by task characteristics of the worker’s occupation. We find that manual tasks are central for the impact of trade because foreign workers compete against domestic workers, in contrast to technical progress which pits man versus machine.

Keywords: Import competition; Inequality; Occupational change; Vocational education (search for similar items in EconPapers)
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-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (57)

Downloads: (external link)
https://cepr.org/publications/DP11311 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:11311

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP11311

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().