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Trade And Labor Markets: Evidence From The Colombian Trade Liberalization Process

Listed author(s):
  • Christian Jaramillo

    ()

  • Jorge Tovar

    ()

The objective of this paper is to measure the impact of trade on the sectoral labor markets. Using the Colombian National Household Survey and comparable trade-related data, we study how changes in trade policy affect the sectoral demands for labor, as measured by the change in wages and employment. We develop a structural model and estimate its reduced form specification to determine an elasticity between measures of sectoral tariffs and labor demand, correcting for tariff endogeneity. The data used covers the period of 1984 through 1999. This allows us to take advantage of the natural experiment represented by the Colombian trade liberalization process of the early nineties. The results suggest that sector tariff levels over the period are positively correlated with their employment levels, but only for tradable sectors. In the case of wages, there is no evidence that they were affected by the trade reform.

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File URL: http://economia.uniandes.edu.co/publicaciones/d2006-28.pdf
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Paper provided by UNIVERSIDAD DE LOS ANDES-CEDE in its series DOCUMENTOS CEDE with number 003651.

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Length: 32
Date of creation: 05 Aug 2006
Handle: RePEc:col:000089:003651
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  1. Jorge Tovar, 2004. "The Welfare Effects Of Trade Liberalization: Evidence From The Car Industry In Colombia," DOCUMENTOS CEDE 003638, UNIVERSIDAD DE LOS ANDES-CEDE.
  2. Ann Harrison & Gordon Hanson, 1999. "Who Gains from Trade Reform? Some Remaining Puzzles," NBER Working Papers 6915, National Bureau of Economic Research, Inc.
  3. Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2005. "Trade, wages, and the political economy of trade protection: evidence from the Colombian trade reforms," Journal of International Economics, Elsevier, vol. 66(1), pages 75-105, May.
  4. Adriana Schor, 2004. "Heterogeneous Productivity Response to Tariff Reduction: Evidence from Brazilian Manufacturing Firms," NBER Working Papers 10544, National Bureau of Economic Research, Inc.
  5. Gene M. Grossman, 1984. "Imports as a Cause of Injury: The Case of the U.S. Steel Industry," NBER Working Papers 1494, National Bureau of Economic Research, Inc.
  6. Schor, Adriana, 2004. "Heterogeneous productivity response to tariff reduction. Evidence from Brazilian manufacturing firms," Journal of Development Economics, Elsevier, vol. 75(2), pages 373-396, December.
  7. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 44-71, July.
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