IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5037.html
   My bibliography  Save this paper

The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages

Author

Listed:
  • Robert E. Baldwin

Abstract

This paper summarizes and assesses recent studies on the impact of current trends in trade and direct investment on employment and wages in OECD countries. The general conclusion is that such factors as changes in labour supplies, technology and demand are more important than changes in trading patterns in accounting for changes in employment and shifts in relative wages. However, further studies are needed to understand better the employment and wage impact of foreign direct investment.

Suggested Citation

  • Robert E. Baldwin, 1995. "The Effects of Trade and Foreign Direct Investment on Employment and Relative Wages," NBER Working Papers 5037, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5037
    Note: ITI LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5037.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1.
    2. Louis T. Wells, Jr., 1992. "Conflict or Indifference: US Multinationals in a World of Regional Trading Blocs," OECD Development Centre Working Papers 57, OECD Publishing.
    3. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 239-300, National Bureau of Economic Research, Inc.
    4. Martin, John P & Evans, John M, 1981. "Notes on Measuring the Employment Displacement Effects of Trade by the Accounting Procedure," Oxford Economic Papers, Oxford University Press, vol. 33(1), pages 154-164, March.
    5. repec:fth:michin:341 is not listed on IDEAS
    6. R. A. Jolly, 1978. "Comment," Economic Papers, The Economic Society of Australia, vol. 1(60), pages 38-42, December.
    7. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    8. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    9. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-987, December.
    10. J. R. McClelland, 1978. "Comment," Economic Papers, The Economic Society of Australia, vol. 1(57), pages 75-77, January.
    11. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
    12. J. B. Donovan, 1978. "Comment," Economic Papers, The Economic Society of Australia, vol. 1(60), pages 69-71, December.
    13. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184, Elsevier.
    14. Driver, Ciaran & Kilpatrick, Andrew & Naisbitt, Barry, 1988. "The sensitivity of estimated employment effects in input-output studies : An example of the use of marginal versus average coefficients," Economic Modelling, Elsevier, vol. 5(2), pages 145-150, April.
    15. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    16. Frank, Robert H. & Freeman, Richard T., 1978. "Distributional Consequences of Direct Foreign Investment," Elsevier Monographs, Elsevier, edition 1, number 9780122650505 edited by Shell, Karl.
    17. Richard E. Caves & Matthew B. Krepps, 1993. "Fat: The Displacement of Nonproduction Workers from U.S. Manufacturing Industries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2 Microec), pages 227-288.
    18. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
    19. R. G. Fry, 1978. "Comment," Economic Papers, The Economic Society of Australia, vol. 1(60), pages 14-15, December.
    20. Wood, Adrian, 1991. "How Much Does Trade with the South Affect Workers in the North?," The World Bank Research Observer, World Bank Group, vol. 6(1), pages 19-36, January.
    21. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," Review of Economic Studies, Oxford University Press, vol. 9(1), pages 58-73.
    22. Hakura, D. & Deardorff, A.V., 1993. "Trade and Wages: What Are the Questions?," Working Papers 341, Research Seminar in International Economics, University of Michigan.
    23. Lawrence F. Katz & Gary W. Loveman & David G. Blanchflower, 1993. "A Comparison of Changes in the Structure of Wages," NBER Working Papers 4297, National Bureau of Economic Research, Inc.
    24. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    25. Grossman, Gene M., 1986. "Imports as a cause of injury: The case of the U.S. steel industry," Journal of International Economics, Elsevier, vol. 20(3-4), pages 201-223, May.
    26. Grossman, Gene, 1982. "The Employment and Wage Effects of Import Competition in the United States," Foerder Institute for Economic Research Working Papers 275356, Tel-Aviv University > Foerder Institute for Economic Research.
    27. Lipsey, Robert E & Weiss, Merle Yahr, 1981. "Foreign Production and Exports in Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 488-494, November.
    28. George J. Borjas & Valerie A. Ramey, 1993. "Foreign Competition, Market Power and Wage Inequality: Theory and Evidence," NBER Working Papers 4556, National Bureau of Economic Research, Inc.
    29. André Sapir & Dieter Schumacher, 1985. "The employment impact of shifts in the composition of commodity and services trade," ULB Institutional Repository 2013/8260, ULB -- Universite Libre de Bruxelles.
    30. Ana L. Revenga, 1992. "Exporting Jobs?The Impact of Import Competition on Employment and Wages in U. S. Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 255-284.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. R. E. Baldwin & G. G. Cain, "undated". "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty.
    2. Nahuis, R., 1997. "On Globalisation, Trade and Wages," Research Memorandum 747, Tilburg University, School of Economics and Management.
    3. Suryahadi, A. & Chen, P. & Tyers, R., 1999. "Openness, Technological Change and Labor Demand in Pre-Crisis Indonesia," Papers 377, Australian National University - Department of Economics.
    4. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    5. Rita A. Balaban & James Harrigan, 1999. "U.S. wages in general equilibrium: the effects of prices, technology and factor supplies, 1963-1991," Staff Reports 64, Federal Reserve Bank of New York.
    6. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
    7. Nathalie Chusseau & Michel Dumont & Joël Hellier, 2008. "Explaining Rising Inequality: Skill‐Biased Technical Change And North–South Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 409-457, July.
    8. Naoko Shinkai, 2000. "Does the Stopler-Samuelson Theorem Explain the Movement in Wages? The Linkage Between Trade and Wages in Latin American Countries," Research Department Publications 4237, Inter-American Development Bank, Research Department.
    9. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    10. Daniel Trefler, 1997. "Immigrants and Natives in General Equilibrium Trade Models," NBER Working Papers 6209, National Bureau of Economic Research, Inc.
    11. Naoko Shinkai, 2000. "¿Explica el teorema Stopler-Samuelson el desplazamiento de los salarios? El vínculo entre el comercio internacional y los salarios en países latinoamericanos," Research Department Publications 4238, Inter-American Development Bank, Research Department.
    12. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394, Elsevier.
    13. Hanson, G.H. & Harrison, A., 1995. "Trade, Technology and Wage Inequality," Papers 95-20, Columbia - Graduate School of Business.
    14. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," NBER Working Papers 5693, National Bureau of Economic Research, Inc.
    15. Henrekson, Magnus & Rosenberg, Nathan, 2000. "Incentives for Academic Entrepreneurship and Economic Performance: Sweden and the United States," SSE/EFI Working Paper Series in Economics and Finance 362, Stockholm School of Economics.
    16. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    17. Jonathan E. Haskel & Matthew J. Slaughter, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," NBER Working Papers 6565, National Bureau of Economic Research, Inc.
    18. Eli Berman, 2000. "Does Factor-Biased Technological Change Stifle International Covergence? Evidence from Manufacturing," NBER Working Papers 7964, National Bureau of Economic Research, Inc.
    19. David Kucera, 2001. "Foreign Trade of Manufactures and Men and Women's Employment and Earnings in Germany and Japan," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(2), pages 129-149.
    20. John T. Addison & Douglas A. Fox & Christopher J. Ruhm, 2000. "Technology, Trade Sensitivity, and Labor Displacement," Southern Economic Journal, John Wiley & Sons, vol. 66(3), pages 682-699, January.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5037. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.