Labour productivity Real compensation per worker Macro-level decoupling reflects declines in labour shares and increases in wage inequality
2. HOW TO MAKE TRADE WORK FOR ALL
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non-displaced low-skilled workers. By contrast, the offshoring of high-skilled tasks tends to accentuate inequality as it boosts the relative productivity of high-skilled workers and
hence wage gaps Lopez-Gonzalez et al., 2015. In addition, even though the impact on employment and wages may be positive for some segments of the production process,
challenges remain for individual workers, as those who benefit from new jobs created may be different from those workers who lose their jobs or suffer lower wages due to offshoring.
Offshoring of services tends to accentuate wage inequality by raising the productivity and wages of skilled workers, while putting downward pressure on demand for low and
medium-skilled workers Crinó, 2012; Geishecker and Görg, 2013. However, available evidence suggests that the job dislocation linked to service imports may be less severe than
for manufacturing, as advanced economies retain a competitive edge in providing sophisticated services. Even so, many displaced workers can only find lower-paying jobs
Liu and Trefler, 2011. These results suggest that more research is needed to make an assessment regarding the global impact of offshoring of services. More detailed
investigation in terms of occupations and types of offshoring would help.
Productivity and wage disparities have increased
Trade has also an effect on wage dispersion through its impact on firms’ productivity. Recent OECD estimates suggest that import competition tends to increase wage disparities
across firms and strengthen the link between productivity and wage dispersion Berlingieri et al., 2017; Figure 2.13. Only the most productive firms export but trade also has an effect
on productivity via a larger market see Box 2.4. Exporting firms tend to upgrade the skills of their workers and can offer higher wages Schank et al., 2007. This could be because more
productive firms appear more selective in their hiring than non-exporters Helpman et al., 2010. Exporting firms tend also to be larger and to have more resources devoted to training
and mobility, perhaps because such firms are at the technological frontier and use more advanced technologies. Both effects increase productivity and demand for high-skilled
Figure 2.13. Wage dispersion is correlated with productivity dispersion
1. Frontier firms are the 5 of firms with the highest labour productivity by year and sector. Industries included are manufacturing and business services, excluding the financial sector, for firms with at least 20 employees.
Source: Andrews, D., C. Criscuolo, and P. Gal 2016, “The Best versus the Rest: The Global Productivity Slowdown, Divergence across Firms and the Role of Public Policy”, OECD Productivity Working Papers, No. 05, OECD Publishing, Paris; Orbis data of Bureau van Dijk; and OECD
calculations. 1 2
http:dx.doi.org10.1787888933502560
2002 2004
2006 2008
2010 2012
90 100
110 120
130 140
Index 2001 = 100 Frontier firms top 5¹
Non-frontier firms