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Globalisation and employment in the OECD

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  • Margit Molnár
  • Nigel Pain
  • Daria Taglioni

Abstract

This article reviews some of the possible changes that may occur in the national labour markets of many OECD countries as a result of the internationalisation of production by multinational companies, with a particular focus on the impact of outward foreign direct investment (FDI) from OECD countries on employment in the home country of the investing firms. Existing studies suggest that the overall impact of trade and the internationalisation of production on aggregate labour market outcomes has been comparatively small, although particular skill and occupational groups have been affected more strongly. The empirical findings in the paper suggest that the aggregate employment impact of outward FDI varies across industries and countries. For manufacturing industries with strong commercial links with the non-OECD economies, there is evidence that domestic employment has become more sensitive to movements in domestic labour costs. At the country level, the growth of outward investment is found to have a significant positive effect on domestic employment growth in the United States. In contrast, there is a negative association in Japan, especially from outward investment in China.

Suggested Citation

  • Margit Molnár & Nigel Pain & Daria Taglioni, 2008. "Globalisation and employment in the OECD," OECD Journal: Economic Studies, OECD Publishing, vol. 2008(1), pages 1-34.
  • Handle: RePEc:oec:ecokac:5kzn3n25440w
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    File URL: http://dx.doi.org/10.1787/eco_studies-v2008-art3-en
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    Cited by:

    1. Jonathan Perraton, 2011. "The Scope and Implications of Globalisation," Chapters,in: The Handbook of Globalisation, Second Edition, chapter 3 Edward Elgar Publishing.
    2. Martin Falk & Yvonne Wolfmayr, 2010. "The substitutability between parent company and foreign affiliate employment in Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 87-100, February.

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