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Trade Liberalization, Labor Markets and Imperfect Competition

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Author Info
Devashish Mitra (Economics, Florida International University)

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Abstract

This paper looks at the recent empirical literature on the effects of trade reforms on firm level wages, employment and labor demand elasticities in import-competing sectors. The focus is empirical investigations using frameworks that allow for imperfect competition. Imperfect competition is product markets allows for changes in elsesticities and markups through trade reforms and thus brings about additional effects on firm-level employment and wages. Further, there is the theoretical possibility of this change in product demand elasticity. These issues are investigated in Kambhapati, Krishna and Mitra (1997) and Kishna, Mitra and Chinoy (forthcoming). In this paper, I discuss the theory, methodologies and results of both of these papers. Further, I investigate the benefits of bringing in imperfect competition in the labor market into the analysis of the labor market impact of trade reforms and in that context discuss some of the recent literature.

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Paper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 29.

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Length: 25 pages
Date of creation: Jul 2001
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Handle: RePEc:ewc:wpaper:wp29

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August. [Downloadable!] (restricted)
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  2. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S20-43, July. [Downloadable!] (restricted)
  3. Nickell, Stephen J & Symons, James, 1990. "The Real Wage-Employment Relationship in the United States," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 1-15, January. [Downloadable!] (restricted)
  4. Krishna, Pravin & Mitra, Devashish & Chinoy, Sajjid, 2001. "Trade liberalization and labor demand elasticities: evidence from Turkey," Journal of International Economics, Elsevier, vol. 55(2), pages 391-409, December. [Downloadable!] (restricted)
  5. Ann Harrison & Ana Revenga, 1995. "The Effects of Trade Policy Reform: What Do We Really Know?," NBER Working Papers 5225, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Revenga, Ana L, 1992. "Exporting Jobs? The Impact of Import Competition on Employment and Wages in U.S. Manufacturing," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 255-84, February. [Downloadable!] (restricted)
  7. Krueger, Anne O & Tuncer, Baran, 1982. "An Empirical Test of the Infant Industry Argument," American Economic Review, American Economic Association, vol. 72(5), pages 1142-52, December. [Downloadable!] (restricted)
  8. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S44-71, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dieter Ernst, 2004. "Searching for a New Role in East Asian Regionlization: Japanese Production Networks in the Electronics Industry," Economics Study Area Working Papers 68, East-West Center, Economics Study Area. [Downloadable!]
  2. Boy Luethje, 2004. "Global Production Networks and Industrial Upgrading in China: The Case in Electronics Contract Manufacturing," Economics Study Area Working Papers 74, East-West Center, Economics Study Area. [Downloadable!]
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