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The demand for skills and labour costs in partner countries

  • Alessia Lo Turco
  • Aleksandra Parteka

We analyse the consequences of trade integration in Europe (1995-2005) detecting how the labor costs in partner countries affects the demand for domestic high- and low-skilled labor in the EU-15 and five new member states. In general, independently on the skill level, the results hint at complementarity between domestic and foreign labor. However, the demand for the high skilled in New EU members' low skill intensive sectors is boosted by the increase of the average labor cost in Old EU members, thus hinting for these sectors at the high skilled in New member countries substituting for labor in Old EU.

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Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 19 (2011)
Issue (Month): 3 (07)
Pages: 611-637

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Handle: RePEc:bla:etrans:v:19:y:2011:i:3:p:611-637
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