Trade in tasks – potentials for internationalisation and their effects on the wage structure and composition of employment

Recent approaches in international trade theory decompose production into a chain of specific tasks and activities. Some of these are internationally tradable, such as the services of computer programmers or accountants, while others are not. The objective of this research project, which is funded by the German Research Foundation (Deutsche Forschungsgemeinschaft, DFG) from 2011 to 2013, is to investigate the implications of different degrees of tradability for product and labour markets in the importing economies. The objective is gain further insights into the degree to which workers are affected by by internationalization, in addition to the differences usually made between high-skilled and low-skilled workers.

In the first module of the project, we measure empirically the degree of tradability of tasks using detailed data on the work requirements for German workers over the last 20 years. On this basis, we aggregate the potential for internationalization to the level of the company, occupation or industry using linked employer-employee data. In the second module, we combine the potential for internationalization with companies’ international activities, as measures by company-level data on the import of services. On this basis, the third module addresses the consequence of the tradability of tasks for the wage structure, the structure of employment and other labour market outcomes.