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Job creation, job destruction, and international competition: a literature review

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  • Michael W. Klein
  • Scott Schuh
  • Robert K. Triest

Abstract

This paper is a chapter in our forthcoming monograph, Job Creation, Job Destruction, and International Competition (W.E. Upjohn Institute, 2003), and expands on the ideas advanced in Klein, Schuh, and Triest (2003). The chapter provides an extensive review of the literature that studies the connection between international factors, such as real exchange rates and trade agreements, and the domestic labor market. Until recently, the literature has focused on the effects of international factors on net employment at aggregate levels or in selected import-competing industries. In the long run, aggregate net employment largely is unaffected by international factors, whereas these factors have important allocative effects in the short and long run, both between and within detailed industries. Thus, it is appropriate to study the components of net employment - gross job creation and destruction - when measuring the impact of international factors on labor markets. Examining gross job and worker turnover associated with changes in international factors raises questions about the accuracy of prior estimates of adjustment costs associated with international factors because gross flows are an order of magnitude larger than net employment flows.

Suggested Citation

  • Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: a literature review," Working Papers 02-7, Federal Reserve Bank of Boston.
  • Handle: RePEc:fip:fedbwp:02-7
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    1. Nucci, Francesco & Pozzolo, Alberto Franco, 2010. "The exchange rate, employment and hours: What firm-level data say," Journal of International Economics, Elsevier, vol. 82(2), pages 112-123, November.
    2. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    3. 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.
    4. Nurmi, Satu, 2004. "Employment Dynamics and Openness to Trade in Finnish Manufacturing," Discussion Papers 956, The Research Institute of the Finnish Economy.
    5. Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2011. "Employment and Exchange Rates: The Role of Openness and Technology," Open Economies Review, Springer, vol. 22(5), pages 969-984, November.
    6. Sebastiano Manzan & Howard N. Ross, 2011. "U.S. Manufacturing: Productivity, Offshoring, and Imports," Economics Bulletin, AccessEcon, vol. 31(4), pages 2875-2883.
    7. Ligia Alba Melo B & Carlos Andrés Ballesteros R, 2012. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Borradores de Economia 9407, Banco de la Republica.
    8. Egger, Peter & Pfaffermayr, Michael & Weber, Andrea, 2003. "Sectoral Adjustment of Employment: The Impact of Outsourcing and Trade at the Micro Level," IZA Discussion Papers 921, Institute of Labor Economics (IZA).
    9. Campbell, Douglas L., 2020. "Relative Prices and Hysteresis: Evidence from US Manufacturing," European Economic Review, Elsevier, vol. 129(C).
    10. Marta Reis Castilho, 2004. "Integração Regional e Conteúdo de Trabalho do Comércio Exterior Brasileiro," Discussion Papers 1028, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Nikolaos Terzidis & Steven Brakman & Raquel Ortega-Argiles, 2019. "Labour Markets, Trade and Technological Progress. A Meta-Study," CESifo Working Paper Series 7719, CESifo.
    12. Edgar Trujillo C. & Carlos Esteban Posada, 2006. "El Proteccionismo No Arancelario Y La Coyuntura Económica: El Caso Colombiano Reciente (1990-2005)," Borradores de Economia 399, Banco de la Republica de Colombia.
    13. 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.
    14. Chipeta Chama & Meyer Daniel Francois & Muzindutsi Paul-Francois, 2017. "The Effect of Exchange Rate Movements and Economic Growth on Job Creation," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 62(2), pages 20-41, August.
    15. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
    16. Douglas L. Campbell, 2013. "Relative Prices, Hysteresis, and the Decline of American Manufacturing," 2013 Papers pca584, Job Market Papers.
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    Keywords

    Employment (Economic theory); Unemployment; Foreign exchange rates; Labor turnover; Labor market;
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