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Globalization and imperfect labor market sorting

Author

Listed:
  • Davidson, Carl
  • Heyman, Fredrik
  • Matusz, Steven
  • Sjöholm, Fredrik
  • Zhu, Susan Chun

Abstract

This paper focuses on the ability of the labor market to efficiently match heterogeneous workers to jobs within a given industry and the role that globalization plays in that process. Using matched worker–firm data from Sweden, we find strong evidence that openness improves the matching between workers and firms in industries with greater comparative advantage. This suggests that there may be significant gains from globalization that have not been identified in the past — globalization may improve the efficiency of the matching process in the labor market. These results remain unchanged after adding controls for technical change at the industry level or measures of domestic anti-competitive regulations and product market competition. Our results are also robust to alternative measures of the degree of matching, openness, and the trade status of an industry.

Suggested Citation

  • Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Zhu, Susan Chun, 2014. "Globalization and imperfect labor market sorting," Journal of International Economics, Elsevier, vol. 94(2), pages 177-194.
    • Handle: RePEc:eee:inecon:v:94:y:2014:i:2:p:177-194
    DOI: 10.1016/j.jinteco.2014.08.001
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    More about this item

    Keywords

    Matching; Globalization; Workers; Multinationals; International Trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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