Changing Trade Pattern, ICT and Employment : Evidence across Countries

The present paper examines the impact of export diversification (both product and destination wise) and ICT on aggregate Employment for a sample of 45 OECD and G20 countries for the period 1990-2019 after controlling for the effects of value-added, wage, physical capital formation, FDI, R&D expenditure and trade liberalization. GMM dynamic panel estimation results suggest that a more product-wise concentrated export structure leads to new employment opportunities. In contrast, geographical diversification of export does not have any impact on overall Employment. The Internet has substitution effects on overall Employment while Mobile is insignificant. We have further explored whether export diversification and ICT have any differential impacts on high and low-skilled workers for 33 OECD and G20 countries for the period 1995 to 2019. Here we find that a greater product wise diversified export structure expands low-skill-intensive jobs, but greater geographical diversification of exports expands high-skill-intensive jobs. As far as ICT use is concerned, we find evidence in favour of skill-biased technological change. Internet use promotes high-skill intensive jobs but displaces low-skilled workers, but Mobile is found to expand job opportunities for low-skill workers but has no impact on high-skill workers. These results have strong policy implications for the countries aiming to create sustainable employment opportunities for unskilled and semi-skilled workers during the post-pandemic revival period