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International Trade and Labour Markets

Time (GMT +01) 00:00 23:59


The impact of international trade on the labour markets of developed and developing countries is an important but contentious issue both in academic research and in policy debates.  In many developed countries, the adverse labour market outcomes observed for less-skilled workers since the 1980s is often attributed to international trade. However, there is considerable disagreement amongst economists regarding the role of trade. Some see increased imports from low-wage developing countries as placing substantial pressure on labour markets in developed countries. An alternative viewpoint sees skill-biased technical change as being the more likely cause. Recently, the potentially negative impact that globalisation may have for less-skilled workers in developed countries has been highlighted by the debate on the implications of business process out-sourcing on the employment prospects of workers in the service sectors, in the UK and US in particular. New research on the role of business and social networks in helping to overcome informal barriers to trade suggest another possible link between international trade and labour markets in developed countries – the possible trade-creating effects of migrant networks.

From a developing country perspective, the conventional wisdom is that unlike the case with developed countries, increased integration with the world economy will be beneficial to less-skilled workers. But this does not seem to be supported by the available empirical evidence, which suggests that many developing countries experienced rising wage inequality after opening to international trade. It appears possible that there is a pervasive skill bias in globalisation. It is also uncertain what prospects international trade offers in creating jobs in developing countries, particularly those located in Africa and Latin America.

This series of research seminars addressed current developments in our knowledge of the inter-relationship between international trade and labour markets both in developed and developing countries. The broad theme of the seminar series is the implication of increasing trade, as one facet of globalisation, for labour markets, including employment, wage inequality and conditions of work.

The seminars provided an opportunity for researchers from a diversity of disciplines to interact with each other, and to engage with the policy community and wider user groups in London-based policy-oriented seminars.