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The impact of trade on employment in Colombian

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  • Yezid HERNÁNDEZ LUNA

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    Abstract

    This article analyses the impact of imports and exports, from and towards the most important Colombian trade partners (United States, European Union, China, Andean Community of Nations, Venezuela, Brazil and Mexico), on employment in the manufacturing sector during 2000 ‐ 2007. We use the System GMM methodology to estimate an equation of labor demand as a function of capital, wage, and a measure of imports and exports. Additionally, we estimate the effects of the share of trade with each trade partner over the labor demand, and compute interaction variables to analyze changes in the effects of international trade across the categories of workers (high and low skilled). Econometric estimations produced, for this period, evidence on inertia in the Colombian labor market. In addition, a substitution relationship between capital and labor was also found. Imports showed no or a negative effect over employment depending on the index of imports used. Analyses by destiny and origin of trade showed that exports to Venezuela and Andean Community of Nations had a negative correlation to employment. Likewise, we found that only commerce with China had some impact on each manufacturing subsector employment, depending on the characteristics of the workers (high or low skilled).

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    Bibliographic Info

    Paper provided by DEPARTAMENTO NACIONAL DE PLANEACIÓN in its series ARCHIVOS DE ECONOMÍA with number 009227.

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    Length: 26
    Date of creation: 31 Oct 2011
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    Handle: RePEc:col:000118:009227

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    1. Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, February.
    2. Castro, Lucio & Olarreaga, Marcelo & Saslavsky, Daniel, 2006. "The impact of trade with China and India on Argentina’s manufacturing employment," MPRA Paper 538, University Library of Munich, Germany.
    3. Attanasio, Orazio & Goldberg, Pinelopi K. & Pavcnik, Nina, 2004. "Trade reforms and wage inequality in Colombia," Journal of Development Economics, Elsevier, vol. 74(2), pages 331-366, August.
    4. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
    5. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
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