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The Impact of Trade Liberalization on Employment, Capital and Productivity Dynamics:

Author

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  • Néstor Gandelman
  • Carlos Casacuberta
  • Gabriela Fachola

Abstract

This paper studies the impact of trade liberalization on labor and capital gross flows and productivity in the Uruguayan Manufacturing Sector. Uruguay opened its economy in the presence of strong –at least initially- unions and structural different industry concentration levels. Higher international exposure implied a slightly higher job creation and an important increase in job and capital destruction. Unions were able to ameliorate this effect. Although not associated with higher creation rates, unions were effective in reducing job and capital destruction. Industry concentration also was found to mitigate the destruction of jobs but had no effect on job creation nor in capital dynamics. The changes in the use of labor and capital brought an increase in total factor productivity specially in sectors where tariff reductions were larger and unions were not present. We found no evidence of varying productivity dynamics across different industry concentration levels

Suggested Citation

  • Néstor Gandelman & Carlos Casacuberta & Gabriela Fachola, 2004. "The Impact of Trade Liberalization on Employment, Capital and Productivity Dynamics:," Econometric Society 2004 Latin American Meetings 97, Econometric Society.
    • Handle: RePEc:ecm:latm04:97
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    References listed on IDEAS

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    1. Richard B. Freeman & Casey Ichniowski, 1988. "When Public Sector Workers Unionize," NBER Books, National Bureau of Economic Research, Inc, number free88-1, March.
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    Cited by:

    1. Gutiérrez, Gabriel, 2005. "Ex-post evaluation of the employment effects of a preferential trade agreement: methodological issues, illustrated with a reference to Chile," Comercio Internacional 4399, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Ligia Melo & Carlos Ballesteros, 2014. "The impact of external factors on job creation and destruction in the Colombian manufacturing sector," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 81, pages 155-186, Julio - D.
    3. Rodrigo Ceni & Gabriel Merlo, 2021. "Twenty years of job flows in an emerging country," Documentos de Trabajo (working papers) 21-10, Instituto de Economía - IECON.
    4. Chama CHIPETA & Daniel Francois MEYER, 2018. "Trade Openness, FDI and Exchange Rate Effects on Job Creation in South Africa's Tradable Sectors," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 197-212.
    5. Adriana Peluffo, 2011. "Integración regional y difusión de tecnologí­a: el caso uruguayo," Documentos de Trabajo (working papers) 11-10, Instituto de Economía - IECON.
    6. Héctor Salgado Banda & Lorenzo Bernal Verdugo, 2011. "Multifactor productivity and its determinants: an empirical analysis for Mexican manufacturing," Journal of Productivity Analysis, Springer, vol. 36(3), pages 293-308, December.
    7. Carlos Casacuberta & Dayna Zaclicever, 2015. "The Effect of Trade Protection on Productivity in Uruguay," Documentos de Trabajo (working papers) 0215, Department of Economics - dECON.
    8. Miguel Mello Costa, 2018. "The Relation of Information Technologies and the Total Factor Productivity in Uruguayan Firms," Documentos de trabajo 2018004, Banco Central del Uruguay.
    9. Daniel Lederman & Marcelo Olarreaga & Guillermo E. Perry, 2009. "China's and India's Challenge to Latin America : Opportunity or Threat?," World Bank Publications, The World Bank, number 2591, September.
    10. Haltiwanger, John & Kugler, Adriana & Kugler, Maurice & Micco, Alejandro & Pagés, Carmen, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Discussion Paper Series In Economics And Econometrics 0410, Economics Division, School of Social Sciences, University of Southampton.
    11. Eduardo Lora & Johanna Fajardo-González, 2016. "Employment and taxes in Latin America: An empirical study of the effects of payroll, corporate income and value-added taxes on labor outcomes," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 35(Especial ), pages 75-117, January.
    12. Carlos Casacuberta & Néstor Gandelman, 2012. "Protection, Openness, and Factor Adjustment: Evidence from the Manufacturing Sector in Uruguay," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 597-629.
    13. Mitra, Arup,, 2013. "Can industry be the key to pro-poor growth? : An exploratory analysis for India," ILO Working Papers 994843463402676, International Labour Organization.
    14. Kazi Mohammed Kamal Uddin & Munem Ahmad Chowdhury, 2020. "Impact of FDI on Employment Level in Bangladesh: A VECM Approach," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 8(1), pages 30-37.
    15. Adriana Peluffo, 2022. "Offshoring and its impact on employment," Documentos de Trabajo (working papers) 22-14, Instituto de Economía - IECON.
    16. Silvia Adriana Peluffo Geronazzo, 2016. "Increased trade openness, productivity, employment and wages: a difference-in-differences approach," Estudios Regionales en Economía, Población y Desarrollo. Cuadernos de Trabajo de la Universidad Autónoma de Ciudad Juárez. 32, Cuerpo Académico 41 de la Universidad Autónoma de Ciudad Juárez, revised 01 Apr 2016.
    17. repec:ilo:ilowps:484346 is not listed on IDEAS
    18. Ottaviano, Gianmarco I.P., 2005. "National Disparities and Regional Allocation of Resources: A Positive Framework," IDB Publications (Working Papers) 2922, Inter-American Development Bank.
    19. Néstor Gandelman, 2008. "Mobility Among Employers and Assortative Matching," Journal of Sports Economics, , vol. 9(4), pages 351-370, August.
    20. John Haltiwanger & Adriana Kugler & Maurice Kugler & Alejandro Micco & Carmen Pages, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(4), pages 191-208.
    21. Calderón, César & Casacuberta, Carlos & Castro, Lucio & Cravino, Javier & Feenstra, Robert C. & Freund, Caroline & Gandelman, Néstor & Hanson, Gordon H. & Kee, Hiau Looi & Lederman, Daniel & Olarreaga, 2009. "China's and India's Challenge to Latin America: Opportunity or Threat?," IDB Publications (Books), Inter-American Development Bank, number 357.
    22. Hlalefang Khobai & Clement Moyo, 2021. "Trade openness and industry performance in SADC countries: is the manufacturing sector different?," International Economics and Economic Policy, Springer, vol. 18(1), pages 105-126, February.
    23. Chama Chipeta, 2022. "Analysing The Employment Effects Of The Exchange Rate, Foreign Direct Investment And Trade Openness On South Africa’S Non-Tradable Sectors," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.

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    More about this item

    Keywords

    job creation; job destruction; total factor productivity;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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