The news that companies in OECD economies are increasingly bringing manufacturing activities back home has attracted a lot of attention in recent years. Headline cases of a number of large multinational companies have given increased visibility to the phenomenon of reshoring in the economic press, academic research and policy discussions. The debate on re-shoring (often also called “backshoring”, “nearshoring”, “onshoring”) is very lively with some even arguing that the time of offshoring has come to an end. But considerable disagreement exists about how important this trend actually is for economies in particular the number of jobs that reshoring is supposed to bring back. While policy makers in OECD economies hope that reshoring might help to revitalise their slumping manufacturing industries, the rationale for policy measures around reshoring is not clear-cut.

The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments of trends in labor's share typically have relied on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S. Economic Census since 1982 and international sources and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of “superstar firms.” If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profits and a low share of labor in firm value-added and sales. As the importance of superstar firms increases, the aggregate labor share will tend to fall. Our hypothesis offers several testable predictions: industry sales will increasingly concentrate in a small number of firms; industries where concentration rises most will have the largest declines in the labor share; the fall in the labor share will be driven largely by between-firm reallocation rather than (primarily) a fall in the unweighted mean labor share within firms; the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; and finally, such patterns will be observed not only in U.S. firms, but also internationally. We find support for all of these predictions.

Over recent decades, the global economy has experienced a profound transformation, mostly as a result of the joint forces of trade integration and technological progress, accompanied by important political changes. Increased trade integration has helped to drive economic growth in both high- and low-income economies, lifting millions out of poverty in emerging and developing countries. Since the global financial crisis of 2007–08, however, trade, productivity and income growth have decelerated. At the same time, trade is increasingly perceived as leaving too many individuals and communities behind. Reaping the benefits from global trade and effective integration into global markets goes hand in hand with the adoption of new technologies, improved forms of work organization and productivity increases. Given the role of skills in trade, it is vital to put a strong emphasis on skills development. Human capital is one of the principal enablers of trade growth and economic diversification and is also an important “buffer” facilitating the adjustment to more open trade. Appropriate skills development policies are key to helping firms expand their export activities; they are also key to helping workers who lose their jobs make a smooth and rapid transition to new jobs with equal or higher wages. These two effects reinforce each other. For trade to grow, it needs to be more inclusive; and more exports offer more employment opportunities. Skills development policies constitute one among many policy instruments available to governments to make trade inclusive by enabling firms and workers to participate in trade, by lowering adjustment costs and by distributing more evenly the benefits of trade and technological progress. Other active labour market policies (ALMPs), such as job-search assistance or activation strategies, passive labour market policies such as unemployment insurance, and social policies, as well as complementary policies such as housing or credit market policies, can also be used to lower adjustment costs, while various instruments are available to redistribute the gains from trade or technology to those whose skills are less in demand because of those changes.

Is automation a labor-displacing force? This possibility is both an age-old concern and at the heart of a new theoretical literature considering how labor immiseration may result from a wave of ‘brilliant machines,’ which is in part motivated by declining labor shares in many developed countries. Comprehensive evidence on this labor-displacing channel is at present limited. Using the recent model of Acemoglu and Restrepo (2018b) as an analytical frame, we first outline the various channels through which automation impacts labor´s share of output. We then turn to empirically estimating the employment and labor share impacts of productivity growth—an omnibus measure of technological change—using data on 28 industries for 18 OECD countries since 1970. Our main findings are that although automation—whether measured by Total Factor Productivity growth or instrumented by foreign patent flows or robot adoption—has not been employment-displacing, it has reduced labor’s share in value-added. We disentangle the channels through which these impacts occur, including own-industry effects, cross-industry input-output linkages, and final demand effects accruing through the contribution of each industry’s productivity growth to aggregate incomes. Our estimates indicate that the labor share-displacing effects of productivity growth, which were essentially absent in the 1970s, have become more pronounced over time, and are most substantial in the 2000s. This finding is consistent with automation having become in recent decades less labor-augmenting and more labor-displacing.

Labor markets in U.S. cities today are vastly more educated and skill-intensive than they were five decades ago. Yet, urban non-college workers perform substantially less skilled work than decades earlier. This deskilling reflects the joint effects of automation and international trade, which have eliminated the bulk of non-college production, administrative support, and clerical jobs, yielding a disproportionate polarization of urban labor markets. The unwinding of the urban non-college occupational skill gradient has, I argue, abetted a secular fall in real non-college wages by: (1) shunting non-college workers out of specialized middle-skill occupations into low-wage occupations that require only generic skills; (2) diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities; and (3) attenuating, to a startling degree, the steep urban wage premium for non-college workers that prevailed in earlier decades. Changes in the nature of work—many of which are technological in origin—have been more disruptive and less beneficial for non-college than college workers.

This paper analyzes the state of the U.S. labor market over the past three decades to inform policymaking on two fronts. The first is to rigorously document and place in historical and international context the trajectory of the U.S. labor market, focusing on the evolving earnings, employment rates, and labor market opportunities for workers with low, moderate, and high levels of education. The second is to illuminate the key forces shaping this trajectory, including: The slowing rate of four-year college degree attainment among young adults, particularly males; Shifts in the gender and racial composition of the workforce; Changes in technology, international trade, and the international offshoring of jobs, which affect job opportunities and skill demands; Changes in U.S. labor market institutions affecting wage setting, including labor unions and minimum wage legislation

This three-year project, commencing in 2018, aims to investigate the sustainability of the research workforce, with a focus on gender equity, workforce diversity, and early career researcher development; identify skills and knowledge priorities for future research and workforce environments, with a focus on data and digital literacy; and develop a distinctive set of workforce strategies to ensure the sector is best placed to contribute to Australia’s future, enabling effective responses to global opportunities and challenges, and to changing national research and training needs.

The disruptive potential of digital technologies has become a hot topic in recent years. There are calls for governments to add or remove regulations, invest in digital start-ups, and protect the jobs of workers threatened by new ways of doing business. This research paper reviews and interprets expert opinion on disruption in order to inform governments about the policy tasks posed by digital technologies. For the Commission, this review sets a broader framing for the formal inquiries into Data Availability and Use, and Intellectual Property Arrangements. It also provides context for important work that we expect to come to us on productivity growth in a time of apparent digital transformation.

This study looks at the impact of student and migrant employment on opportunities for low skilled people. It improves our understanding of the changing nature of low skilled work, and accounts for the attitudes and motivations of low skilled people and employers in one local economic area: the city of Coventry and the wider Coventry and Warwickshire sub-region. Following a mixed method approach of interviews, focus groups, secondary data analysis and a UK wide literature review, the study presents little evidence to support anecdotal suggestions of students and migrants displacing low skilled people from opportunities in the local labour market. Instead the study highlights the varying job search priorities and techniques employed by different groups of individuals when seeking low skilled work; and explores how far they match those of employers. The research considers the impact of student and migrant employment on three aspects of employability: the ability of lower skilled workers to find employment; to remain in employment, rather than cycling between paid work and unemployment; and to progress within work, for example through engaging in training. It also illustrates the importance of the local economic and demographic context when seeking to promote employment and progression in work amongst low skilled people. In essence, this study represents a valuable contribution to the policy debate around creating a sustainable market for skills that can support economic growth and individual progression for all.