Service Trade and Occupational Tasks: An Empirical Investigation

Working Paper: CEPR ID: DP8761

Authors: Andrea Ariu; Giordano Mion

Abstract: Using micro data for Belgium we investigate the relationship between occupational tasks changes and the rise of service trade. We focus the analysis on the extensive margin and look at the heterogeneous proliferation of firms involved in exports and imports of services across sectors characterized by different tasks changes patterns. Occupational tasks changes display an extremely consistent relationship with participation to service trade across firm groups pointing to strong churning effects. The change in analytical (interactive and routine cognitive) tasks intensity has a positive (negative) impact across the board meaning that, in industries characterized by larger changes, firms have experienced both higher (lower) likelihood of entry and exit. The negative relationship between the change in interactive tasks and service exports participation underlines the special role that proximity between demand and supply plays for services. Interestingly, we find exactly the opposite result (a positive relationship) between the extensive margin of goods exports and interactive tasks. Moreover, our analysis suggests that the change in IT use per se does not strike as being a key underlying force behind the increase in the extensive margin of service exports.

Keywords: Extensive Margin; Occupational Tasks; Technological Change; Trade in Services

JEL Codes: F14; F16; L80; O33

Causal Claims

Cause	Effect
Changes in occupational tasks (J29)	Service trade participation (F19)
Increase in analytical tasks intensity (C89)	Likelihood of firms entering or exiting service trade (F12)
Changes in interactive tasks intensity (C99)	Service export participation (F10)
Interactive tasks (Y10)	Extensive margin of goods exports (F10)
Technological change (IT use) (O33)	Service export participation (F10)
Offshoring (F23)	Rise of service trade (F19)