International trade and employment: trade partner country effects on jobs and wages

Recent academic research has consistently identified trading firms - both exporters and importers - to be larger, and to pay higher wages than their non-trading counterparts. However, not all trade is equal: imports from low-wage countries may destroy employment, particularly among low-skilled workers. Similarly, export markets may vary with respect to their fixed set-up costs which may be reflected in different sizes and wages (skill levels) required for internationalisation. This chapter examines whether the country of origin and/or destination of international trade flows is an extra explanation for differences in employment and wages, in addition to enterprise size, locus of control
and economic activity.