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

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Listed:
  • Christian Jaramillo
  • Jorge Tovar

Abstract

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.

Suggested Citation

  • Christian Jaramillo & Jorge Tovar, 2006. "Trade And Labor Markets: Evidence From The Colombian Trade Liberalization Process," Documentos CEDE 3651, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:003651
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    References listed on IDEAS

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    Cited by:

    1. Juan Felipe Mejía & Leonardo-Fabio Morales & Daniel S. Medina, 2018. "Trade liberalization and its effects on labor fluidity: Evidence from Colombia," The International Trade Journal, Taylor & Francis Journals, vol. 32(1), pages 43-75, January.

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    More about this item

    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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