Intra-industry Trade Exposure, Fragmentation, and Labor Adjustment

摘要: Over the last two decades, labor market prospects of low skilled in OECDcountries deteriorated sharply. Developments like these have been frequently traced back to low-cost competition from abroad. Yet, Heckscher-Ohlin hypothesis is hard reconcile with fact that OECD-trade for most (and growing) part intraindustry trade (IIT). IIT usually regarded as much less disruptive it considered affect regional composition product demand, but not necessarily demand. The paper proposes a model trade-induced technology choice which, contrary many beliefs, generates substantial shifts demand and employment. These changes are due implementation being associated spill-over effects related business services production fragmentation within across firms. can account number stylized facts OECD-labor markets, including bimodal growth high low-skilled employment, recent concentration skill management business-service occupations, line statistics based on input-output tables suggesting methods changed tandem exposure foreign competition.