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Content archived on 2024-05-14

Globalization and social exclusion

Objective



(i) to ascertain using a combination of data analysis, econometrics, case studies and simulation models the precise role played by international trade in influencing the relative employment and wages of unskilled workers in Europe. This will involve a detailed analysis of individual EU member states to take account of differences in industrial structures, social policies and technological change and labour markets and labour market policies;

(ii) to investigate how firms and industries have responded and adjusted to increased international competition from low wage economies

(iii) to clearly identify the policy implications of the above research and to design a possible strategy for responding to future increases in the supply of low-skill products onto the world market from low-wage economies

We seek to evaluate the impact of globalization and changes in the international division of Europe on the low qualified segment of the labour force after taking into account the role of other factors, such as technology and recent changes in labour market regulation. The underlying theme of this research project is that adjustments within broad industrial sectors in response to increased trade are more important than the inter-sectoral adjustments that have been the focus of previous research on the labour market impact of trade.

We will employ four different but highly complementary empirical approaches to the issue:

- first, intensive data collection and analysis, considering a range of EU countries and making relevant international comparisons, with perhaps the US, Canada and Japan;

- second, econometric analysis, in order to evaluate both the magnitude and statistical significance of the key processes by which trade influences domestic labour markets;

- third, case studies, to provide insights into how individual firms have responded to increased competition from abroad, and the role of national labour market systems and policies in determining their response; and
- fourth, Computable General Equilibrium modelling, analysis with which will allow detailed evaluation of the complex interactions within and between different sectors, including a decomposition and comparison of the impact of all the main factors which may have played a significant role in generating unemployment and wage inequality for the unskilled in Europe, such as, trade, technology, changes in domestic taxation and labour market and social policies.

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Coordinator

UNIVERSITY OF WARWICK
EU contribution
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Address
Gibbet Hill Road
CV32 5UP WARWICK
United Kingdom

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Total cost

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Participants (5)

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