There are various paths through which globalization is channelled to the labour market. We set up a general framework in which globalization has an indirect effect on labour demand via wage elasticity and also a direct effect, acting as a domestic labour demand shifter. Within this framework, a labour demand is estimated using a industry-year panel from a number of industrialised countries, over the period 1970-96. Overall we do not find any significant substitution effect of trade on labour demand elasticity. The only exception is France.