Working Paper: NBER ID: w9716
Authors: Vanessa Strauss-Kahn
Abstract: Growth in international trade and globalization has been correlated in nearly all countries with a worsening of the less skilled labor situation relative to the skilled. In this empirical paper, I show that an important component of recent globalization in France has been a huge growth in vertical specialization -- the completion of the different production stages of a good in different countries. By shifting relative labor demand across countries, globalization of this form could explain the poor relative showing of unskilled labor in industrial countries. Using input-output tables and labor data, I find that in France vertical specialization -- defined as the share of imported inputs in production -- rose from 9% in 1977 to 14% in 1993. Further estimations show that vertical specialization contributed from 11% to 15% of the decline in the share of unskilled workers in French manufacturing employment for the 1977-1985 period and for 25% of the decline in the 1985-1993 period.
Keywords: No keywords provided
JEL Codes: F15; F16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| vertical specialization (L23) | decline in unskilled labor share in manufacturing employment (F66) |