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International Trade, Comparative Advantage and the Incidence of Layoff Unemployment Spells

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  • Hungerford, Thomas L
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    Abstract

    The gains and losses to factors of production from trade are discussed primarily within the context of the Stolper-Samuelson theorem which focuses on factor rewards. But policy makers are more concerned about employment effects of trade. This paper focuses on the short-run effects of trade on the incidence of layoffs in U.S. manufacturing industries. A probit model with endogenous switching is employed to estimate the effects of trade shocks and explore the role of comparative advantage on layoffs. The evidence suggests that trade shocks play a minor role in the incidence of layoff spells. However, net importing industries tend to adjust their labor force through layoffs to a greater extent than net exporting industries. Copyright 1995 by MIT Press.

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    Bibliographic Info

    Article provided by MIT Press in its journal Review of Economics & Statistics.

    Volume (Year): 77 (1995)
    Issue (Month): 3 (August)
    Pages: 511-21

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    Handle: RePEc:tpr:restat:v:77:y:1995:i:3:p:511-21

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    Web page: http://mitpress.mit.edu/journals/

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    Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535

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    Cited by:
    1. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.

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