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Globalization and Imperfect Labor Market Sorting

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Author Info

  • Davidson, Carl

    (Michigan State University)

  • Heyman, Fredrik

    (The Research Institute of Industrial Economics)

  • Matusz, Steven

    (Michigan State University)

  • Sjöholm, Fredrik

    ()
    (Department of Economics, Lund University)

  • Zhu, Susan Chun

    (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 industries with greater comparative advantage. 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. 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. 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 Lund University, Department of Economics in its series Working Papers with number 2011:25.

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Length: 49 pages
Date of creation: 15 Jul 2011
Date of revision:
Handle: RePEc:hhs:lunewp:2011_025

Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Related research

Keywords: Matching; Globalization; Firms; Workers; Multinational Enterprises; International Trade;

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Citations

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Cited by:
  1. Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Zhu, Susan Chun, 2012. "Liberalized Trade and Worker-Firm Matching," Working Papers 2012:3, Lund University, Department of Economics.
  2. Pravin Krishna & Jennifer P. Poole & Mine Zeynep Senses, 2011. "Wage Effects of Trade Reform with Endogenous Worker Mobility," NBER Working Papers 17256, National Bureau of Economic Research, Inc.
  3. 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.
  4. Ornelas, Emanuel, 2012. "Preferential Trade Agreements and the Labor Market," CEPR Discussion Papers 8805, C.E.P.R. Discussion Papers.
  5. Gabriel J. Felbermayr & Andreas Hauptmann & Hans-Jörg Schmerer, 2012. "International Trade and Collective Bargaining Outcomes: Evidence from German Employer-Employee Data," Ifo Working Paper Series Ifo Working Paper No. 130, Ifo Institute for Economic Research at the University of Munich.
  6. 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.
  7. 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.
  8. Gene Grossman, 2013. "Heterogeneous workers and international trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(2), pages 211-245, June.
  9. 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.
  10. Inga Heiland & Wilhelm Kohler, 2013. "Heterogeneous Workers, Trade, and Migration," CESifo Working Paper Series 4387, CESifo Group Munich.
  11. Sly, Nicholas, 2012. "Labor matching behavior and trade adjustment," European Economic Review, Elsevier, vol. 56(3), pages 592-604.

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