New evidence on the effects of services trade at the worker level

The striking expansion of services trade since the start of the 21st century contrasts with the scarcity of studies exploring its labour market implications. Combining industry-level trade data with over 80 million individual-level observations from labour force surveys for 32 countries between 2008 and 2021, this paper addresses this gap. The results show that growth in services exports is linked with increased employment, particularly in business-to-business services sectors. Imported services used as intermediate inputs appear to bring substantial job gains in non-services sectors. The findings also indicate a shift away from self-employment and into employment in larger firms in response to opportunities created through services trade. With three out of four workers in OECD Member countries employed in services sectors, this paper’s results suggest that further liberalisation of services trade could provide significant benefits for workers.