Publication

This paper compiles and examines the results of empirical analyses which find that trade is a significant cause of labor market inequality in various industrialized countries. The approach is based upon the concept of outsourcing. The authors show that imports from low-wage countries have made a significant contribution to the decline in the wage-bill share and the relative employment of less-skilled workers in the UK, the US, Sweden and Italy. The report also explains how the country-specific characteristics of outsourcing can lead to different inequality outcomes and how technology plays an important role in this context.