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The Impact of Trade and Outsourcing on Skilled and Unskilled Labour in France

Author

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  • Esther Tsafack
  • Jaai Parasnis

Abstract

This paper investigates the effect of trade and outsourcing on demand for labour in France, including the role of exports. We analyse the impact of outsourcing - imported inputs - on unskilled labour in manufacturing industry during 1990-2002 and find that outsourcing has a significant negative effect on the relative demand for unskilled labour. This could be potentially mitigated by exports in manufacturing, which are found to increase the demand for unskilled labour. Our analysis of economy- wide impact of trade over 1970-2003 finds that imported goods and services, as well as total exports, contribute to the skilled-unskilled differential by increasing the demand for skilled labour. These trade variables, however, have no statistically significant impact on the demand for unskilled labour.

Suggested Citation

  • Esther Tsafack & Jaai Parasnis, 2010. "The Impact of Trade and Outsourcing on Skilled and Unskilled Labour in France," Monash Economics Working Papers 32-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2010-32
    as

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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/3210impacttsafackparasnis.pdf
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    References listed on IDEAS

    as
    1. Oecd, 1998. "OECD Data on Skills: Employment by Industry and Occupation," OECD Science, Technology and Industry Working Papers 1998/4, OECD Publishing.
    2. Vanessa Strauss-Kahn, 2004. "The Role of Globalization in the Within-Industry Shift Away from Unskilled Workers in France," NBER Chapters, in: Challenges to Globalization: Analyzing the Economics, pages 209-231, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International trade; outsourcing; skill differentials; production theory;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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