Labour Market Polarization in Advanced Countries: Impact of Global Value Chains, Technology, Import Competition from China and Labour Market Institutions

Koen Breemersch, Joze Damijan and Jozef Konings

No 197, OECD Social, Employment and Migration Working Papers from OECD Publishing

Abstract: This paper explores the effects of offshoring, technology and Chinese import competition on labor market polarization in European countries. We find that polarization occurs mostly as a result of polarization within individual industries, while the reallocation of employment away from less polarized industries towards more highly polarized industries also contributed to a lesser extent. In manufacturing, within-industry polarization is mostly associated with technological change, but we also find some tentative evidence that Chinese import competition contributed as well. In other private industries outside of manufacturing, technological change and offshoring are the most relevant forces affecting within-industry polarization. The process of between-industry polarization is driven by widespread deindustrialization in developed countries. We find that Chinese import competition contributed to the decline of employment in the less polarized manufacturing industries. Differences in labor market institutions only explain a limited amount of cross-country variation in the association of polarization and the three forces we consider.

JEL-codes: E24 F14 F16 J23 J31 L60 O47 (search for similar items in EconPapers)
Date: 2017-10-31
New Economics Papers: this item is included in nep-cna, nep-int, nep-lma, nep-mac and nep-tid
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:elsaab:197-en

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