Overview

Drawing on three fields of economics (international, labour, and development), this study shows that expansion of North-South trade in manufactures has had a far greater impact on labour markets than earlier work suggested. In the South, unskilled workers have benefited most from this trade, but in the North, the gains have been concentrated on skilled labour, while unskilled workers have suffered falling wages and rising unemployment. This decline in the economic position of unskilled workers has increased inequality, and aggravated crime and other forms of social erosion, on both sides of the Atlantic.The failure of Northern governments to recognize that trade with the South has these adverse side-effects, and to take appropriate counter-measures, has fuelled the rise of protectionism - the worst possible response, which slows economic progress in both regions. The best solution for the longer term in the North is more investment in education, to raise the supply of skilled labour. However, the benefits of this investment will emerge slowly. During the next one or two decades, Professor Wood argues, other measures are also urgently needed to boost the demand for, and incomes of, unskilled workers.

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9780198290155

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Reviews

Wood's provocative study marks a significant contribution to the unfolding debate, and will be a major spur to further analysis. Jeffrey Sachs, Harvard University a thorough and serious evaluation of the consequences for employment and inequality of North-South trade in manufactures ... The book is an important one. It deserves to be widely read and will be extensively discussed ... an excellent book. It is clearly written, stimulating and thought provoking. Times Higher Education Supplement

Wood's provocative study marks a significant contribution to the unfolding debate, and will be a major spur to further analysis. Jeffrey Sachs, Harvard University a thorough and serious evaluation of the consequences for employment and inequality of North-South trade in manufactures ... The book is an important one. It deserves to be widely read and will be extensively discussed ... an excellent book. It is clearly written, stimulating and thought provoking. Times Higher Education Supplement

`Adrian Wood's impressive study of North-South trade could not be more timely ... Wood's provocative study marks a significant contribution to the unfolding debate, and will be a major spur to further analysis.' Jeffrey Sachs, Harvard University `Adrian Wood has tackled one of today's thorniest economic problems - the impact of North-South trade on employment. His provocative analysis deserves the most careful scrutiny by economists and policy makers.' William Nordhaus, Yale University `Professor Wood has done a thorough and compelling job of exploring and explaining one of the most important economic trends of the last two decades.' Alan Deardorff, University of Michigan `I am sure the book should be read and debated by economists and policy analysts concerned with the effect of trade on the labour market.' Richard Freeman, Professor of Economics, Harvard University and London School of Economics `This important and carefully argued book underlines the necessity for the extensive promotion of education and training in developed countries, if they are to maintain international competitiveness in the face of competition from third world countries and avoid mass unemployment.' Frances Stewart, Director, Queen Elizabeth House, University of Oxford `Adrian Wood's impressive study of North-South trade could not be more timely. As the North grapples with high unemployment, widening income inequality, and the absorption of the former Communist countries into the world trading system, the public debate is focusing on international trade as a possible source of the current stresses in the advanced economies ... Wood's provocative study marks a significant contribution to thr unfolding debate, and will be a major spur to further analysis.' Jeffrey Sachs, Professor of International Trade, Harvard University `Adrian Wood has tackled one of today's thorniest economic problems - the impact of North-South trade on employment. His provocative analysis deserves the most careful scrutiny by economists and policy makers.' William Nordhaus, Professor of Economics, Yale University `Professor Wood has done a thorough and compelling job of exploring and explaining one of the most important economic trends of the last two decades.' Alan Deardorff, Professor of Economics, University of Michigan `This is an important book on a major economic issue: whether trade with third world countries endangers the economic well-being of low-skill workers in advanced countries. Wood does a masterful job in posing the problem, laying out the theory, and challenging the conventional view that trade with the third world doesn't matter all that much ... I am sure the book should be read and debated by economists and policy analysts concerned with the effect of trade on the labour market.' Richard Freeman, Professor of Economics, Harvard University and London School of Economics `This important and carefully argued book underlines the necessity for the extensive promotion of education and training in developed countries, if they are to maintain international competitiveness in the face of competition from third world countries and avoid mass unemployment.' Frances Stewart, Director, Queen Elizabeth House, University of Oxford `The dramatic shift over the past decade towards greater inequality of incomes and wealth will not be news to readers of this column. This trend is one of the most important changes occurring in the developed economies, affecting not merely the pattern of spending on goods and services but also the politics and the cohesion of our societies ... And this week saw the publication of a key contribution to the debate: Adrian Wood's North-South trade, employment and inequality.' Christopher Huhne, Independent on Sunday `Wood's book is part of a growing body of work on inequality, which seeks to explain the slump in demand for unskilled labour in developed economies, manifested in falling real wages for many American workers and persistently high unemployment in Europe. But what distinguishes it from the received wisdom is that is places trade with developing countries, rather than technological change, at the centre of the explanation. The argument is summed up by the author with typical clarity.' David Goodhart, Financial Times `a key contribution to the debate: Adrian Wood's North-South trade, employment and inequality ...Mr Wood's new book confronts this conventional wisdom head-on ... Indeed, the evidence marshalled by Mr Wood is both fascinating and difficult to dismiss.' Christopher Huhne, Indepdent on Sunday `One interesting idea, proposed by Mr Wood, is to reform employers' social-security taxes, so that the rate of tax rises with the level of wages.' The Economist `This book forgoes the rhetoric and concentrates instead on analysis. It is a thorough and serious evaluation of the consequences for employment and inequality of North-South trade in manufactures. That the author does not shrink from a discussion of the policy implications of his analysis makes the work all the more attractive. The book is an important one. It deserves to be widely read and will be extensively discussed ... Overall this is an excellent book. It is clearly written, stimulating and thought provoking.' David Greenaway, The Higher `Ma cio che distingue la posizione di Wood dall'atteggiamento piu diffuso e il collocare al centro della sua speigazione del fenomeno gli scambi commerciali con i Paesi piu sviluppati invece che le trasformazioni tecnologiche ... Il ragionamento e riassunto dall'autore con grande chiarezza nel primo paragrafo ... Wood delineato in modo efficace il ruolo degli scambi commerciali nel dibattito sulle specializzazioni, l'uguaglianza e.' Mondo Economico `Wood has written a challenging and provocative study.' Industrial and Labor Relations Review `An impressive synthesis of observations and arguments on North-South trade and its implications, particularly for employment. Rich in references and facts ... it should be of major interest both to those concerned with the theoretical framework for international trade and to those concerned with empirical aspects of development and international economics, policy making, and implications for social welfare.' Journal of Developing Areas

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