Globalization and Labour-Market Adjustment: How Fast and at What Cost?
AbstractIn this paper we argue that the flexibility of an economy's labour market plays a role in determining the gains from trade liberalization, the level of short-run adjustment costs, and the relative value of these two measures. To do so, we describe the model introduced in Davidson and Matusz (2000) which allows us to solve for adjustment costs when workers vary according to ability and jobs differ in terms of the skills that they require. We then report results based on simulations of this model. We find that economies with sluggish labour markets have the least to gain from liberalization. The reason is that while the removal of trade barriers creates large benefits, they are almost completely offset by large short-run adjustment costs. In contrast, we find that with either very flexible or very slothful labour market gains from liberalization are always significantly larger than the short-run adjustment costs. Copyright 2000 by Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 16 (2000)
Issue (Month): 3 (Autumn)
Contact details of provider:
Web page: http://oxrep.oupjournals.org/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Dr Kaniz Siddique, 2003. "Deceleration in the Export Sector of Bangladesh and Women Workers: Assessing Impacts and Identifying Coping Strategies," CPD Working Paper 26, Centre for Policy Dialogue (CPD).
- Bernard Hoekman, 2004.
"Policies Facilitating Firm Adjustment to Globalization,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 20(3), pages 457-473, Autumn.
- Hoekman, Bernard & Smarzynska Javorcik, Beata, 2004. "Policies Facilitating Firm Adjustment to Globalization," CEPR Discussion Papers 4692, C.E.P.R. Discussion Papers.
- Hoekman, Bernard & Smarzynska Javorcik, Beata, 2004. "Policies facilitating firm adjustment to globalization," Policy Research Working Paper Series 3441, The World Bank.
- Wignaraja, Ganeshan & Krüger, Jens & Tuazon, Anna Mae, 2013. "Production Networks, Profits, and Innovative Activity: Evidence from Malaysia and Thailand," ADBI Working Papers 406, Asian Development Bank Institute.
- Rossana Patrón, 2012. "Short-term specificity and training: Key issues for economic restructuring," Documentos de Trabajo (working papers) 0212, Department of Economics - dECON.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.