Growing shares of international trade flows consist of intermediate and unfinished goods shipped from one country to another to combine manufacturing or services activities at home with those performed abroad. This configuration of the productive structure has been named “internationally fragmented”. The purpose of our work is to analyze the labor market effects of international fragmentation of production in Europe, looking at how it affects relative labor demand. Models of trade due to fragmentation of production suggest that when international fragmentation takes place we can expect to observe a change in the relative factor intensities of the affected industries. We use international trade data specifically related to international fragmentation of production to test if the shift in intensity of skilled and unskilled labor employed in Italy and Germany during the 1990s it related to the fragmentation activity.
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Paper provided by EconWPA in its series International Trade with number
0405002.
Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
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Deardorff, A.V., 1998.
"Fragmentation Across Cones,"
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Pol Antràs & Elhanan Helpman, 2003.
"Global Sourcing,"
NBER Working Papers
10082, National Bureau of Economic Research, Inc.
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