The assessment: Globalization and labour-market adjustment

Over the last two decades there has been a significant deterioration in the labour-market outcomes of less skilled labour in most OECD countries. This has manifested itself either in terms of a decline in wages relative to th e most skilled, or in terms of the relative likelihood of being in work. Mu ch recent research has focused on the impact of trade and skill-biased tech nical change as alternative explanations of the phenomenon; some has also i nvestigated the role of cross-border investment and migration. This paper r eviews recent research on globalization and labour-market adjustment and se ts the scene for the papers that follow.