The Effect of International Trade on Labour Demand Elasticities: Intersectoral Matters
AbstractThis paper studies the impact of trade on the price-elasticity of aggregate labor demand, based on the idea that a variation in the cost of (a given type of) labor has an effect on the sectoral trade specialization of an economy, at the expense of the domestic productions using this factor intensively, even when the trade balance is kept unchanged. As this effect is more important the more open the economy, trade openness induces an increase in the associated labor-demand elasticity, at least if the country has a comparative disadvantage in the industries using intensively the type of labor considered. This argument is illustrated by a simple model, based on an Armington hypothesis, with an empirical assessment for France. Copyright 2000 by Blackwell Publishing Ltd.
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Bibliographic InfoPaper provided by CEPII research center in its series Working Papers with number 2000-07.
Date of creation: May 2000
Date of revision:
International Trade; Labor demand elasticity; specialization; Factor markets; Economic policy; Labor market; Factor costs; Growth;
Other versions of this item:
- Jean, Sebastien, 2000. "The Effect of International Trade on Labor-Demand Elasticities: Intersectoral Matters," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 8(3), pages 504-16, August.
- F15 - International Economics - - Trade - - - Economic Integration
- F10 - International Economics - - Trade - - - General
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
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