Wage-gain to mainly benefit highly-skilled workers
Increase in exports can not only result in higher wages in India, but also better jobs — including more formal jobs for youth and women, according to a joint report by the World Bank and the International Labour Organisation.
The report, titled “Exports to Jobs: Boosting the Gains from Trade in South Asia”, said that increasing exports would boost average wages.
The biggest beneficiaries of the wage gains would be the high-skilled, urban, more experienced, and mainly male workers. For low-skilled workers, the shift would result in an increase in formal jobs.
Policies in place
“Our research shows exports can improve the performance of local labour markets. Policies need to be put in place to increase exports in South Asia, while ensuring that the benefits of higher exports are shared more broadly,” said Gladys Lopez-Acevedo, World Bank’s lead economist. The report analyses the effect on local employment and wages of changes in exports by combining disaggregated data from household-level or worker-level surveys with trade data from India and Sri Lanka.
The approach builds on a new wave of research looking at how globalisation might contribute to local jobs and wages.
However, unlike previous studies, it focusses on exports, said the statement.
“Economists and policy makers need a better understanding of how exactly globalisation affects both workers and national labour markets,” said Daniel Samaan, Senior Economist, ILO Research Department.