Autori
Celi, Giuseppe
Segnana, Maria Luigia

Titolo
Trade and labour markets : vertical and regional differentiation in Italy
Periodico
Università degli studi di Trento. Dipartimento di Economia. Discussion papers
Anno: 1998 - Fascicolo: 10 - Pagina iniziale: 1 - Pagina finale: 42

The labour market misfortunes of the less skilled and rapid growth of intemational trade in manufactured goods with less advanced countries are linked by the paradoxical observation that trade theorists are in the forefront of those denying the importance of trade in income distribution. This paper analyses this conclusion by stressing the importance of vertical differentiation of trade flows and regional differentiation of skills in order to identify labour market effects of trade integration. Vertical and regional differentiation in trade and labour markets are analyzed for a country, Italy, where these two elements seem to play a crucial role. The results show a likely displacement effect of trade flows with less advanced countries on unskilled labour. Given the characteristics of Italian trade and labour markets, a stronger trade-induced displacement effect on demand far unskilled labour takes place in the North of the country. Thus the vertical differentiation in Italian intra-industry trade is a warning against understating the effect of trade on labour markets if product heterogeneity is not adequately considered. The regional differentiation of skill intensity is another warning against understating the effect of trade on labour markets whenever cross-sectoral effect and the change in relative specialization are not adequately considered.




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