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

Author

Listed:
  • Koen Breemersch

    (University of Leuven)

  • Jože P. Damijan

    (University of Ljubljana)

  • Jozef Konings

    (Nazarbayev University)

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.

Suggested Citation

  • Koen Breemersch & Jože P. Damijan & Jozef Konings, 2017. "Labour Market Polarization in Advanced Countries: Impact of Global Value Chains, Technology, Import Competition from China and Labour Market Institutions," OECD Social, Employment and Migration Working Papers 197, OECD Publishing.
    • Handle: RePEc:oec:elsaab:197-en
    DOI: 10.1787/06804863-en
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    Citations

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    Cited by:

    1. Luca Marcolin & Mariagrazia Squicciarini, 2018. "Investing in Innovation and Skills: Thriving through Global Value Chains," Review of Economics and Institutions, Università di Perugia, vol. 9(1).
    2. Paul J. J. Welfens, 2020. "Trump’s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism," International Economics and Economic Policy, Springer, vol. 17(3), pages 563-634, July.
    3. Paul J. J. Welfens, 2020. "Trumps Wirtschaftspolitik und der Corona-Schock - Perspektiven für die USA [Trumps Economic Policy and the Corona Shock - Perspectives for the USA]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 100(11), pages 848-855, November.
    4. Kim, In Kyung & Konings, Jozef, 2019. "Wage inequality and establishment heterogeneity," Japan and the World Economy, Elsevier, vol. 50(C), pages 47-55.
    5. Žilvinas Martinaitis & Aleksandr Christenko & Jonas AntanaviÄ ius, 2021. "Upskilling, Deskilling or Polarisation? Evidence on Change in Skills in Europe," Work, Employment & Society, British Sociological Association, vol. 35(3), pages 451-469, June.
    6. Gravina, Antonio Francesco & Foster-McGregor, Neil, 2020. "Automation, globalisation and relative wages: An empirical analysis of winners and losers," MERIT Working Papers 2020-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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