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Trade liberalization and intersectoral labor movements

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  • Wacziarg, Romain
  • Wallack, Jessica Seddon

Abstract

This paper examines the impact of trade liberalization episodes on movements of labor across sectors. The aim is to evaluate the empirical support for two classes of models: those where the effects of trade are mediated by structural change, and those where the effects of trade do not rely on such sectoral shifts. Our results provide evidence consistent with the latter. Surprisingly, we find small or negative effects of liberalization on intersectoral labor shuffling at the economy-wide 1-digit level of disaggregation. Increased sectoral change at the 3 and4 digit levels within manufacturing, as a result of trade liberalization,. is mainly attributable to increases in manufacturing labor supply that is spread unevenly across sectors, rather than to movements of jobs across manufacturing subsectors.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 64 (2004)
Issue (Month): 2 (December)
Pages: 411-439

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Handle: RePEc:eee:inecon:v:64:y:2004:i:2:p:411-439

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Web page: http://www.elsevier.com/locate/inca/505552

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  1. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S44-71, July.
  2. Levinsohn, James, 1999. "Employment responses to international liberalization in Chile," Journal of International Economics, Elsevier, vol. 47(2), pages 321-344, April.
  3. Richard B. Freeman & Lawrence F. Katz, 1991. "Industrial Wage and Employment Determination in an Open Economy," NBER Chapters, in: Immigration, Trade and the Labor Market, pages 235-259 National Bureau of Economic Research, Inc.
  4. Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February.
  5. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jenson & Samuel Kortum, 2000. "Plants and Productivity in International Trade," NBER Working Papers 7688, National Bureau of Economic Research, Inc.
  6. Aaron Tornell, 1998. "Reform from Within," Harvard Institute of Economic Research Working Papers 1827, Harvard - Institute of Economic Research.
  7. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  8. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July.
  9. Albuquerque, Rui & Rebelo, Sergio, 2000. "On the dynamics of trade reform," Journal of International Economics, Elsevier, vol. 51(1), pages 21-47, June.
  10. Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
  11. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
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