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Trade and Turnover: Theory and Evidence

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Author Info

  • Carl Davidson

    (Michigan State University)

  • Steven Matusz

    (Michigan State University)

Abstract

Is the pattern of trade correlated with cross-sector differences in job turnover? Theoretically, external shocks feed through to changes in domestic employment and cross-sector differences in turnover give rise to compensating wage differentials, which feed through to output prices. Using two different data sets on turnover, we find strong evidence that normalized US net exports by sector are negatively correlated with job destruction and worker separation rates. Weaker evidence suggests a positive correlation with between normalized net exports and job acquisition. Using sector-specific job destruction data for both Canada and the US, we find confirmation of the theoretical prediction that normalized net exports to Canada are negatively related to the ratio of the US job destruction rate to the Canadian job destruction rate.

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File URL: http://128.118.178.162/eps/it/papers/0503/0503009.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0503009.

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Length: 43 pages
Date of creation: 15 Mar 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0503009

Note: Type of Document - pdf; pages: 43. 43 pages, PDF file
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Web page: http://128.118.178.162

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Keywords: Job Creation; Job Destruction; Trade; Labor;

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References

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  1. Daron Acemoglu & Jorn-Steffen Pischke, 1998. "Beyond Becker: Training in Imperfect Labor Markets," NBER Working Papers 6740, National Bureau of Economic Research, Inc.
  2. Christopher Magee & Carl Davidson & Steven Matusz, 2005. "Trade, Turnover, and Tithing," International Trade 0503010, EconWPA.
  3. Bilsen, Valentijn & Konings, Jozef, 1998. "Job Creation, Job Destruction, and Growth of Newly Established, Privatized, and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary, and Romania," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 429-445, September.
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  7. Borland, Jeff, 1996. "Job Creation and Job Destruction in Manufacturing Industry in Australia," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 46-62, March.
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  9. John Baldwin & Timothy Dunne & John Haltiwanger, 1998. "A Comparison Of Job Creation And Job Destruction In Canada And The United States," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 347-356, August.
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  12. Davidson, Carl & Martin, Lawrence & Matusz, Steven, 1999. "Trade and search generated unemployment," Journal of International Economics, Elsevier, vol. 48(2), pages 271-299, August.
  13. Haveman, J.D., 1994. "The Influence of Changing Trade Patterns of Displacements of Labor," Papers 94-012, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
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