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Trade Competition, Technology and Labour Reallocation

Author

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  • Baziki, Selva B.

    (Central Bank of Turkey)

  • Ginja, Rita

    (University of Bergen)

  • Borota Milicevic, Teodora

    (Uppsala University)

Abstract

This paper provides new evidence on the reallocation of workers across firms and industries with different technologies in response to increased import competition from developing countries. Using employer-employee matched data for the Swedish manufacturing sector, we find increased assortative matching of workers in ICT (information and communication technologies) intensive industries, that is, high(low)-wage workers sort into high(low)-wage firms. Industries with low ICT intensity do not exhibit these sorting patterns. A labour market matching model explains the increased assortative matching in ICT intensive industries in response to stronger import competition through an increase in the relative demand for qualified workers.

Suggested Citation

  • Baziki, Selva B. & Ginja, Rita & Borota Milicevic, Teodora, 2016. "Trade Competition, Technology and Labour Reallocation," IZA Discussion Papers 10034, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10034
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    Cited by:

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    3. Edoardo Di Porto & Enrica Maria Martino & Henry Ohlsson, 2021. "Avoiding taxes by transfers within the family," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(1), pages 1-23, February.
    4. Borrs, Linda & Knauth, Florian, 2016. "The impact of trade and technology on wage components," DICE Discussion Papers 241, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    5. Kumar, Anil & Liang, Che-Yuan, 2020. "Estimating taxable income responses with elasticity heterogeneity," Journal of Public Economics, Elsevier, vol. 188(C).
    6. Tobias Laun & Johanna Wallenius, 2021. "Having It All? Employment, Earnings, and Children," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 353-381, January.
    7. Borrs, Linda & Knauth, Florian, 2021. "Trade, technology, and the channels of wage inequality," European Economic Review, Elsevier, vol. 131(C).
    8. Graetz, Georg, 2020. "Technological change and the Swedish labor market," Working Paper Series 2020:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Gueyon Kim & Dohyeon Lee, 2020. "Offshoring and Segregation by Skill: Theory and Evidence," Working Papers 2020-073, Human Capital and Economic Opportunity Working Group.
    10. Zhuhua Jiang & Chizheng Miao & Jose Arreola Hernandez & Seong-Min Yoon, 2022. "Effect of Increasing Import Competition from China on the Local Labor Market: Evidence from Sweden," Sustainability, MDPI, vol. 14(5), pages 1-18, February.

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    More about this item

    Keywords

    wage inequality; employment dynamics; assortative matching; import competition; technological change;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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