Trade Competition, Technology and Labor Re-allocation
2015 (English)Report (Other academic)
This paper studies the changes in labor allocation across ﬁrms and industries in response to changes in technology (captured by the adoption of information and communication technologies, ICT) and import competition, due to increased exposure to trade competition from China. We use detailed matched worker-ﬁrm data from the Swedish manufacturing sector. We provide new evidence on the mobility of heterogeneous workers across ﬁrms and document increased assortative matching of workers in ICT intensive industries. However, the sorting patterns are not uniform across industries within this group. The adoption of ICT along with stronger Chinese import competition results in a signiﬁcant skill upgrade within high-wage ﬁrms. In contrast, in the absence of strong pressures in import competition, sorting occurs at the low end of the worker-ﬁrm distribution, i.e. low-skill workers allocate to low-wage ﬁrms. Industries with low ICT intensity do not exhibit any of these sorting patterns. We rationalize our empirical ﬁndings through a labor market matching model which is able to explain the increased assortative matching in ICT intensive industries through an increase in the relative demand for qualiﬁed workers.
Place, publisher, year, edition, pages
2015. , 83 p.
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2016:1
Wage Inequality, Employment Dynamics, Assortative Matching, Import Competition, Technological Change.
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-270907OAI: oai:DiVA.org:uu-270907DiVA: diva2:890791