Nordic Economic Policy Review

Globalization, labour market institutions and wage structure

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The Nordic Economic Policy Review is published by the Nordic Council of Ministers and addresses policy issues in a way that is useful for in-formed non-specialists as well as for professional economists. All articles are commissioned from leading professional economists and are subject to peer review prior to publication. The review appears twice a year. It is published electronically on the website of the Nordic Council of Ministers: www.norden.org/en. On that website, you can also order paper copies of the Review (enter the name of the Review in the search field, and you will find all the information you need). Managing Editor: Professor Torben M. Andersen, Department of Economics, University of Aarhus, Denmark. Special Editors for this volume: Research Professor Erling Barth, Institute for Social Research, Oslo, Norway and Professor Kalle O. Moene, Department of Economics, University of Oslo, Norway.



Comment on Hummels, Munch and Xiang: Education and labor market policies in an offshoring global economy

It is well known from the vast stock of research building on Davis et al. (1998) that labor markets are characterized by massive amounts of simultaneous job destruction and job creation, and that most of this restructuring is unrelated to structural change as measured by regional or sectoral mobility. Recently, the literature has seen a number of examples, trying to provide a better understanding of the underlying sources of this churning process (see e.g. Foster et al., 2008). In this context, the impressive research agenda summarized by Hummels, Much and Xiang is a very important addition. Its focus on offshoring shocks provides insights into a part of the labor restructuring process where too little has been known before. My reading of the results of the paper is that offshoring shocks have a very clear restructuring component, which makes the results even more important. In this comment, I will primarily focus on the policy aspects of the paper as well as touch on some aspects of how the results can be interpreted.


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