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Technical change, jobs, and wages in the global economy

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  • Baldwin, Richard
  • Haaland, Jan I.
  • Venables, Anthony J.

Abstract

This paper presents a compact and intuitive framework that consolidates, simplifies, and extends results on the links between technology, trade, and labour market outcomes. It makes three main contributions. First, it presents closed-form solutions for the impacts of different types of technical change (TC) on jobs (the sectoral allocation of employment) as well as on wages, prices and output. Second, it shows that wage and employment effects are positively correlated only for certain types of TC and certain parameters, so wage and employment impacts need to be examined separately. Third, we incorporate a non-traded sector into our framework and show how employment in this sector alters results by offering a new margin of adjustment. The impact of TC on relative wages is dampened, although its sign is not changed.

Suggested Citation

  • Baldwin, Richard & Haaland, Jan I. & Venables, Anthony J., 2025. "Technical change, jobs, and wages in the global economy," Journal of International Economics, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:inecon:v:155:y:2025:i:c:s0022199625000212
    DOI: 10.1016/j.jinteco.2025.104065
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • 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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