This paper presents a compact and intuitive framework that consolidates, simplifies, and extends results on the links between technology, trade, and labour market outcomes. It makes three main contributions. First, it presents closed-form solutions for the impacts of different types of technical change (TC) on jobs (the sectoral allocation of employment) as well as on wages, prices and output. Second, it shows that wage and employment effects are positively correlated only for certain types of TC and certain parameters, so wage and employment impacts need to be examined separately. Third, we incorporate a non-traded sector into our framework and show how employment in this sector alters results by offering a new margin of adjustment. The impact of TC on relative wages is dampened, although its sign is not changed.

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Available online 1 May 2025

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Journal of International Economics 1552025

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DOI: 10.1016/j.jinteco.2025.104065

https://www.sciencedirect.com/science/article/pii/S0022199625000212

This Journal article is published under the centre's Trade programme, Urban programme.