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Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco

  • Currie, Janet
  • Harrison, Ann E

The authors examine the impact of recent trade reforms. Although employment in the average private sector manufacturing firm was unaffected, there were significant employment losses to exporters and highly affected firms. Parastatals increased employment by hiring low-paid temporary workers. Many firms did not adjust wages or employment. The authors examine two possible explanations. First, barriers to labor market mobility could have impeded adjustment. Second, the authors develop a model of labor demand which allows for imperfect competition and endogenous technological change. Their results suggest that, although labor markets were flexible, many firms cut profit margins and raised productivity rather than reducing employment. Copyright 1997 by University of Chicago Press.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 15 (1997)
Issue (Month): 3 (July)
Pages: S44-71

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Handle: RePEc:ucp:jlabec:v:15:y:1997:i:3:p:s44-71
Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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  1. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  2. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
  3. Claudia Goldin & Robert A. Margo, 1991. "The Great Compression: The Wage Structure in the United States at Mid- Century," NBER Working Papers 3817, National Bureau of Economic Research, Inc.
  4. Rosen, Sherwin, 1978. "Substitution and Division of Labour," Economica, London School of Economics and Political Science, vol. 45(179), pages 235-50, August.
  5. Finis Welch, 1969. "Linear Synthesis of Skill Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 4(3), pages 311-327.
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