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Globalization and Imperfect Labor Market Sorting

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Author Info

  • Davidson, Carl

    (Michigan State University)

  • Heyman, Fredrik

    ()
    (Research Institute of Industrial Economics (IFN))

  • Matusz, Steven

    (Michigan State University)

  • Sjöholm, Fredrik

    ()
    (Research Institute of Industrial Economics (IFN))

  • Chun Zhu, Susan

    (Michigan State University)

Abstract

This paper focuses on the ability of the labor market to correctly match heterogeneous workers to jobs within a given industry and the role that globalization plays in that process. Using matched worker-firm data from Sweden, we find strong evidence that openness improves the matching between workers and firms in export-oriented industries. This suggests that there may be significant gains from globalization that have not been identified in the past – globalization may improve the efficiency of the matching process in the labor market. On the other hand, we find no evidence that openness affects the degree of matching in import-competing industries. These results remain unchanged after adding controls for technical change at the industry level or measures of domestic anti-competitive regulations and product market competition. In addition, we find no evidence that technical change has any impact on the degree of matching at the industry level. Our results are also robust to alternative measures of the degree of matching, openness, or the trade status of an industry.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 856.

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Length: 47 pages
Date of creation: 30 Dec 2010
Date of revision:
Handle: RePEc:hhs:iuiwop:0856

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Keywords: Matching; Firms; Workers; Globalization; Sweden;

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References

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Citations

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Cited by:
  1. Gene M. Grossman, 2013. "Heterogeneous Workers and International Trade," NBER Working Papers 18788, National Bureau of Economic Research, Inc.
  2. Felbermayr, Gabriel & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2012. "International trade and collective bargaining outcomes : evidence from German employer-employee data," IAB Discussion Paper 201207, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Sly, Nicholas, 2012. "Labor matching behavior and trade adjustment," European Economic Review, Elsevier, vol. 56(3), pages 592-604.
  4. Runjuan Liu & Daniel Trefler, 2011. "A Sorted Tale of Globalization: White Collar Jobs and the Rise of Service Offshoring," NBER Working Papers 17559, National Bureau of Economic Research, Inc.
  5. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 2012. "Trade and Inequality: From Theory to Estimation," NBER Working Papers 17991, National Bureau of Economic Research, Inc.
  6. Ornelas, Emanuel, 2012. "Preferential Trade Agreements and the Labor Market," CEPR Discussion Papers 8805, C.E.P.R. Discussion Papers.
  7. Judith A. Frias & David S. Kaplan & Eric Verhoogen, 2012. "Exports and Within-Plant Wage Distributions: Evidence from Mexico," American Economic Review, American Economic Association, vol. 102(3), pages 435-40, May.
  8. Daniel Baumgarten, 2010. "Exporters and the Rise in Wage Inequality – Evidence from German Linked Employer-Employee Data," Ruhr Economic Papers 0217, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  9. Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Chun Zhu, Susan, 2012. "Liberalized Trade and Worker-Firm Matching," Working Paper Series 912, Research Institute of Industrial Economics.
  10. Krishna, Pravin & Poole, Jennifer P. & Senses, Mine Zeynep, 2014. "Wage Effects of Trade Reform with Endogenous Worker Mobility," Journal of International Economics, Elsevier, vol. 93(2), pages 239-252.
  11. Kaplan, David S. & Lederman, Daniel & Robertson, Raymond, 2012. "What drives short-run labor market volatility in offshoring industries ? evidence from northern Mexico during 2007-2009," Policy Research Working Paper Series 6268, The World Bank.
  12. Inga Heiland & Wilhelm Kohler, 2013. "Heterogeneous Workers, Trade, and Migration," CESifo Working Paper Series 4387, CESifo Group Munich.

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