Working Paper: CEPR ID: DP1451
Authors: Damien Neven; Charles Wyplosz
Abstract: This paper explores the link between trade and European labour markets by using evidence on relative commodity prices and intra-sectoral skill levels at the NACE three-digit level for the four large EC countries and for the period 1976?90. We find that if the relative import prices of unskilled labour intensive sectors have not fallen significantly over time, substantial and varied restructuring is observed in those sectors. Defensive restructuring, involving upgrading of skills and expansion, is about as common as the contraction of employment and wages predicted by the Hecksher-Ohlin principle.
Keywords: trade; european labour markets
JEL Codes: F02; F11; J30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| import prices (P22) | industry wages (J31) |
| import prices (P22) | employment (J68) |
| trade competition from developing countries (F14) | relative price of unskilled labor-intensive commodities (F66) |
| trade competition from developing countries (F14) | employment in unskilled labor-intensive sectors (F66) |
| trade competition from developing countries (F14) | wages in unskilled labor-intensive sectors (F66) |
| trade competition from developed countries (F14) | adjustments in various industries (L69) |