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Digital trade and labour markets in the United Kingdom

Author

Listed:
  • Sebastian Benz
  • Alexander Jaax
  • Elisabeth van Lieshout

Abstract

The contribution of services in the United Kingdom (UK) to exports, value added, and employment is one of the highest amongst OECD countries. UK employment also depends strongly on exports of digital services: in 2019 the jobs of around 3.2 million domestic workers in digital services sectors were embodied in UK exports. Median wages in these services are considerable higher than wages in other sectors of the UK economy. Econometric analysis shows that strong growth of employment in digital services generates multiplier effects benefitting local economies in the United Kingdom, with each additional digital services job creating around 0.3 jobs in the local non-tradable sector. Continued support for plurilateral and multilateral initiatives to dismantle barriers to services trade, including via the WTO Joint Initiative on Services Domestic Regulation, can help to enable more UK firms to take advantage of the potential for further growth in digital services trade. Improving the availability of training programmes and aligning curricula with the rapidly evolving needs of exporters of digital services is crucial to enable for workers to shift into sectors with growing labour demand.

Suggested Citation

  • Sebastian Benz & Alexander Jaax & Elisabeth van Lieshout, 2024. "Digital trade and labour markets in the United Kingdom," OECD Trade Policy Papers 284, OECD Publishing.
    • Handle: RePEc:oec:traaab:284-en
    DOI: 10.1787/f3de4400-en
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    More about this item

    Keywords

    E-commerce; Multipliers; Services Trade; Wages;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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