Foreign Trade and Employment (Theoretical Approach)

The intensified studies on the influence of foreign trade on employment were provoked by the globalization of the world economy. The majority of studies are based on the traditional theory of trade, which views the changes in employment in the light of alterations in the structure of output. The limited power of this theory to explain certain phenomena caused by trade on the labour market, as well as the results of empirical research have been conducive to the evolution of research on one hand, and to the development of alternative directions of studies on the other. The emergence of models that include varying elasticity of labour markets and international outsourcing is the manifestation of the first tendency, while one of the signs of the second tendency is the inclusion, in the studies of foreign trade's impact on employment, of changes in labour productivity, bargaining power of trade unions and the elasticity of demand for labour.