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Trade Liberalisation and Employment Effects in Ukraine

  • Atanas Christev

    ([1] Department of Economics and CERT, Heriot-Watt University, Edinburgh, UK [2] IZA, Schaumburg-Lippe, Str 7-9, D-53113 Bonn, Germany)

  • Olga Kupets

    ([1] 2IZA, Schaumburg-Lippe, Str 7-9, D-53113 Bonn, Germany [2] 3Department of Economics, National University-Kiev Mohyla Academy, Ukraine)

  • Hartmut Lehmann

    ([1] Department of Economics and CERT, Heriot-Watt University, Edinburgh, UK [2] IZA, Schaumburg-Lippe, Str 7-9, D-53113 Bonn, Germany [3] 4DARRT, Department of Economics, University of Bologna, Strada Maggiore 45, Bologna 40125, Italy)

This paper addresses the effects of trade liberalisation on job flows. It studies the case of Ukraine where the sudden opening up of the economy to trade can be viewed as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows to account for shifting trade patterns after the disintegration of the Soviet Union and the Council of Mutual Economic Assistance (CMEA) trade regime. We provide, for the first time, evidence on job flows at the three-digit sector level in Ukrainian manufacturing and show that these flows are predominantly driven by idiosyncratic factors within industries. However, we also establish that trade openness does affect job flows differently across different trading areas. We find that while trade with Commonwealth of Independent States decreases job destruction, trade with the European Union increases excess reallocation mainly through job creation. Comparative Economic Studies (2008) 50, 318–340. doi:10.1057/palgrave.ces.8100250

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Article provided by Palgrave Macmillan in its journal Comparative Economic Studies.

Volume (Year): 50 (2008)
Issue (Month): 2 (June)
Pages: 318-340

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Handle: RePEc:pal:compes:v:50:y:2008:i:2:p:318-340
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