The impact of trade on the relative wages and employment of low skill workers in France

The impact of international trade on labour markets in developed countries will be different according to the degree of competition in product markets, the flexibility of the labour market and the skill intensity of production. An econometric analysis of the impact of trade in France has been undertaken using sectoral data for the period 1985–p1992. It is found that lower relative import prices reduce the relative employment of low skill workers in the first half the period and reduce their relative wages in the second half. In both cases the effect is more pronounced in sectors where the skill intensity of production is initially low.