International Trade and the Changing Demand for Skilled Workers in High-Tech Manufacturing

States and localities in the U.S. put considerable effort into attracting and maintaining high-tech manufacturing industries to preserve manufacturing employment. However, little work has examined whether high-tech industries respond differently than traditional manufacturing to changing trade pressures. This study investigates the impact of international trade on skilled and unskilled labor demand across manufacturing sectors. Results of this study indicate that changes in exchange rates and trade orientation have similar effects across high-tech and traditional manufacturing sectors. In addition, findings suggest that there is a high degree of variation in the trade-related effects on labor demand across individual high-tech sectors, and that the direction of these effects often runs counter to the predictions of traditional trade theory. Copyright (c) 2008 Blackwell Publishing.