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International trade and the position of European low-skilled labour

This paper presents a discussion of the potential channels through which international trade affects the position of low skilled workers in the European Union. After an analysis of the European Union's trade flows showing the predominant role of intra-industry trade with other industrialised countries, the discussion focuses on the potential effects of intra-industry trade on low skilled labour. Particular attention is paid to possible interactions between trade and technological change and to the possible effects of trade on the price elasticity of labour. The paper also discusses how trade may affect incentives to invest in skills and thus a country's potential to alter the skill structure of its working force.

No: ERAD-2000-01

Marion Jansen

Manuscript date:  November 2000

Key Words  

Intra-industry trade, skill inequalities, investment in skills

JEL classification numbers  

F10, J31, J24

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This is a working paper, and hence it represents research in progress. This paper represents the opinions of individual staff members or visiting scholars, and is the product of professional research. It is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors are the fault of the authors. Copies of working papers can be requested from the divisional secretariat by writing to: Economic Research and Analysis Division, World Trade Organization, rue de Lausanne 154, CH-1211 Genève 21, Switzerland. Please request papers by number and title.

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