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 the most skilled, or in terms of the relative likelihood of being in work. Much recent research has focused on the impact of trade and skill-biased technical change as alternative explanations of the phe nomenon; some has also investigated the role of cross-border investment and migration. This paper reviews recent research on globalization and labour-market adjustment and sets the scene for the papers that follow.