UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.


Trade and Employment

Stylized Facts and Research Findings

The substantial literature investigating the links between trade, trade policy, and labour market outcomes has generated a number of stylized facts, but many open questions remain. A common finding is that much of the shorter-run impacts of trade and reforms involve reallocation of labour or wage impacts within sectors. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in recent decades. A priority area for future research is to study the employment effects of services trade and investment reforms.


Keywords: trade and wages, trade and employment, trade liberalization, labour markets
JEL: D33: Microeconomics / Distribution / Factor Income Distribution; D30: Microeconomics / Distribution / Distribution: General; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
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