GI-NI‘s fifth Webinar will be a great chance to understand our integrated view on globalisation and technological change.
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OVERVIEW
The question of how trade and automation impact labor markets is much studied, yet little is known about the effects on the “correct” matching between jobs and workers with different levels of education. We conduct an empirical analysis into the impact of trade and automation on educational mismatch across 11 Western European countries between 2002 and 2018. To do so, we measure educational mismatch at the occupational level using realized matches from the European Labor Force Survey (EU-LFS). To identify the effects of trade and automation, we exploit the emergence of Eastern Europe as a central trade partner for Western Europe along with the unprecedented rise of robots as important sources of variation in the data. We construct exposure measures based on the pre-determined weight of occupations in industries most heavily involved in trade and automation, and address endogeneity concerns using third-country trade and robots as instruments. We find some evidence that exports and imports affected matching differently, while automation caused an increase in the share of workers that are mismatched (overeducated for the work they do).