Globalization and deindustrialization: Myth and reality in the OECD

Has global integration adversely impacted workers in the US and Europe? The expansion of trade and other linkages with the South has been blamed for a multitude of ills in the North, including the contraction of manufacturing employment. Utilizing panel data for OECD countries, this paper examines the relationship between "deindustrialization" and differential productivity growth, Dutch disease, human capital accumulation and trade flows. Empirical results indicate there is a statistically and economically significant link between imports from the South and the manufacturing share of employment and real value added, even after controlling for other plausible causes of deindustrialization.