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A mapping of labor mobility costs in the developing world

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  • Artuc, Erhan
  • Lederman, Daniel
  • Porto, Guido

Abstract

Estimates of labor mobility costs are needed to assess the responses of employment and wages to trade shocks when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries. We propose a method to estimate mobility costs using readily obtainable data worldwide. Our estimator matches the changes in observed sectoral employment allocations with the predicted allocations from a model of costly labor adjustment. We estimate a world map of labor mobility costs and we use those estimates to explore the response of labor markets to trade policy.

Suggested Citation

  • Artuc, Erhan & Lederman, Daniel & Porto, Guido, 2015. "A mapping of labor mobility costs in the developing world," Journal of International Economics, Elsevier, vol. 95(1), pages 28-41.
  • Handle: RePEc:eee:inecon:v:95:y:2015:i:1:p:28-41
    DOI: 10.1016/j.jinteco.2014.10.007
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    Cited by:

    1. Augusto de la Torre & Alain Ize & Guillermo Beylis & Daniel Lederman, "undated". "Jobs, Wages and the Latin American Slowdown," World Bank Other Operational Studies 22709, The World Bank.
    2. Alonso-Carrera, Jaime & Raurich, Xavier, 2018. "Labor mobility, structural change and economic growth," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 292-310.
    3. Dai Zusai, 2018. "Evolutionary dynamics in heterogeneous populations: a general framework for an arbitrary type distribution," Papers 1805.04897, arXiv.org, revised May 2019.
    4. Brambilla, Irene & Porto, Guido, 2016. "Trade, Poverty Eradication, and the Sustainable Development Goals," ADBI Working Papers 629, Asian Development Bank Institute.
    5. Stijepic, Denis, 2019. "On development paths minimizing the aggregate labor-reallocation costs in the three-sector framework and an application to structural policy," Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203519, Verein für Socialpolitik / German Economic Association.
    6. Shen, Wenyi & Yang, Shu-Chun S. & Zanna, Luis-Felipe, 2018. "Government spending effects in low-income countries," Journal of Development Economics, Elsevier, vol. 133(C), pages 201-219.
    7. Devashish Mitra, 2019. "Responses to Trade Opening: Evidence and Lessons from Asia," Working Papers id:12977, eSocialSciences.
    8. José Pulido & Tomasz Swiecki, 2019. "Barriers to Mobility or Sorting? Sources and Aggregate Implications of Income Gaps across Sectors and Locations in Indonesia," 2019 Meeting Papers 1298, Society for Economic Dynamics.
    9. Benjamin Gampfer & Ingo Geishecker, 2019. "Chinese competition: intra-industry and intra-firm adaptation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(2), pages 327-352, May.
    10. Artuc, Erhan & Porto, Guido & Rijkers, Bob, 2019. "Trading off the income gains and the inequality costs of trade policy," Journal of International Economics, Elsevier, vol. 120(C), pages 1-45.
    11. Eddy Bekkers & Joseph Francois, 2018. "A Parsimonious Approach to Incorporate Firm Heterogeneity in CGE-Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 3(2), pages 1-68, December.
    12. Claire H. Hollweg & Daniel Lederman & Diego Rojas & Elizabeth Ruppert Bulmer, 2014. "Sticky Feet : How Labor Market Frictions Shape the Impact of International Trade on Jobs and Wages," World Bank Publications, The World Bank, number 18777, 12-2019.
    13. David Atkin & Amit Khandelwal, 2019. "How Distortions Alter the Impacts of International Trade in Developing Countries," NBER Working Papers 26230, National Bureau of Economic Research, Inc.
    14. Almås, Ingvild & Grewal, Mandeep & Hvide, Marielle & Ugurlu, Serhat, 2017. "The PPP approach revisited: A study of RMB valuation against the USD," Journal of International Money and Finance, Elsevier, vol. 77(C), pages 18-38.
    15. Dai Zusai, 2017. "Nonaggregable evolutionary dynamics under payoff heterogeneity," DETU Working Papers 1702, Department of Economics, Temple University.
    16. Elizabeth Ruppert Bulmer & Claire H. Hollweg, 2016. "The Labor Impact of Lao Export Growth," World Bank Other Operational Studies 24020, The World Bank.
    17. Raymond Robertson, 2018. "Effects of regulating international trade on firms and workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 439-439, June.
    18. Jan Trenczek, 2016. "Promoting Growth-Enhancing Structural Change: Evidence from a Panel of African, Asian, and Latin American Countries," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 207, Courant Research Centre PEG.
    19. Bi, Huixin & Shen, Wenyi & Yang, Shu-Chun S., 2016. "Fiscal limits in developing countries: A DSGE Approach," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 119-130.
    20. Rosario Aldunate & Gabriela Contreras & Matías Tapia, 2019. "Sectoral Transitions Between Formal Wage Jobs in Chile," Working Papers Central Bank of Chile 836, Central Bank of Chile.
    21. Gabriela Cugat, 2019. "Emerging markets, household heterogeneity, and exchange rate policy," 2019 Meeting Papers 526, Society for Economic Dynamics.
    22. Margaret S. McMillan & Brian McCaig, 2019. "Trade Liberalization and Labor Market Adjustment in Botswana," NBER Working Papers 26326, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    World labor mobility costs; Wage dynamics; Employment dynamics;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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