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Trade Liberalization and Employment Effects in Ukraine

  • A. Christev
  • O. Kupets
  • H. Lehmann

This paper addresses a controversial issue in the current literature, namely the effects of trade liberalisation on labour market job flows. It studies the case of Ukraine where we view the sudden openness of the economy to trade as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows according to the shifting trade patterns after the disintegration of CMEA trade regime. We provide some first evidence that 3-digit NACE sector job flows are driven by idiosyncratic factors within industries. Other things equal, there is increased labour shedding as larger non-state share in industry relates to less job creation and more job destruction. Trade openness does affect job flows in Ukrainian manufacturing disproportionately according to trade orientation. We find that while trade with CIS decreases job destruction, trade with the EU increases excess reallocation mainly through job creation.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 552.

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Date of creation: 2005
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Handle: RePEc:bol:bodewp:552
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  1. Hartmut Lehmann & Norberto Pignatti & Jonathan Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," CERT Discussion Papers 0504, Centre for Economic Reform and Transformation, Heriot Watt University.
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