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A Mapping of Labor Mobility Costs in the Developing World

Author

Listed:
  • Erhan Artuç

    (WORLD BANK)

  • Daniel Lederman

    (WORLD BANK)

  • Guido Porto

    (Universidad Nacional de La Plata)

Abstract

Estimates of labor mobility costs are needed to assess the responses of employment and wages to a trade shock when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries. In this paper, we propose a method to estimate mobility costs using data that is more easily obtainable worldwide. Our estimator matches observed employment flows with those flows predicted by a model of costly labor adjustment. We estimate a mapping of labor mobility costs for the developing world and we use those estimates to explore the response of labor markets (wages and employment) to trade policy.

Suggested Citation

  • Erhan Artuç & Daniel Lederman & Guido Porto, 2013. "A Mapping of Labor Mobility Costs in the Developing World," CEDLAS, Working Papers 0146, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0146
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    References listed on IDEAS

    as
    1. Gueorgui Kambourov, 2009. "Labour Market Regulations and the Sectoral Reallocation of Workers: The Case of Trade Reforms," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1321-1358.
    2. Wacziarg, Romain & Wallack, Jessica Seddon, 2004. "Trade liberalization and intersectoral labor movements," Journal of International Economics, Elsevier, vol. 64(2), pages 411-439, December.
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    5. Naércio Aquino Menezes Filho & Marc-Andreas Muendler, 2007. "Labor Reallocation in Response to Trade Reform," CESifo Working Paper Series 1936, CESifo Group Munich.
    6. Shubham Chaudhuri & John McLaren, 2007. "Some Simple Analytics of Trade and Labor Mobility," NBER Working Papers 13464, National Bureau of Economic Research, Inc.
    7. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
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    9. Carl Davidson & Steven J. Matusz, 2004. "International Trade and Labor Markets: Theory, Evidence, and Policy Implications," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number itlm, November.
    10. Erhan Artuç & Shubham Chaudhuri & John McLaren, 2010. "Trade Shocks and Labor Adjustment: A Structural Empirical Approach," American Economic Review, American Economic Association, vol. 100(3), pages 1008-1045, June.
    11. Davidson, Carl & Matusz, Steven J, 2000. "Globalization and Labour-Market Adjustment: How Fast and at What Cost?," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 42-56, Autumn.
    12. Carl Davidson & Steven J. Matusz, 2006. "Long-run Lunacy, Short-run Sanity: a Simple Model of Trade with Labor Market Turnover," Review of International Economics, Wiley Blackwell, vol. 14(2), pages 261-276, May.
    13. Sebastian Galiani & Guido G. Porto, 2010. "Trends in Tariff Reforms and in the Structure of Wages," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 482-494, August.
    14. Rafael Dix‐Carneiro, 2014. "Trade Liberalization and Labor Market Dynamics," Econometrica, Econometric Society, vol. 82(3), pages 825-885, May.
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    16. Artuç, Erhan & Chaudhuri, Shubham & McLaren, John, 2008. "Delay and dynamics in labor market adjustment: Simulation results," Journal of International Economics, Elsevier, vol. 75(1), pages 1-13, May.
    17. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
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    Citations

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    Cited by:

    1. Augusto de la Torre & Alain Ize & Guillermo Beylis & Daniel Lederman, "undated". "Jobs, Wages and the Latin American Slowdown," World Bank Other Operational Studies 22709, The World Bank.
    2. Bi, Huixin & Shen, Wenyi & Yang, Shu-Chun S., 2016. "Fiscal limits in developing countries: A DSGE Approach," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 119-130.
    3. Jan Trenczek, 2016. "Promoting Growth-Enhancing Structural Change: Evidence from a Panel of African, Asian, and Latin American Countries," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 207, Courant Research Centre PEG.
    4. Dai Zusai, 2017. "Nonaggregable evolutionary dynamics under payoff heterogeneity," DETU Working Papers 1702, Department of Economics, Temple University.
    5. Brambilla, Irene & Porto, Guido, 2016. "Trade, Poverty Eradication, and the Sustainable Development Goals," ADBI Working Papers 629, Asian Development Bank Institute.
    6. Elizabeth Ruppert Bulmer & Claire H. Hollweg, 2016. "The Labor Impact of Lao Export Growth," World Bank Other Operational Studies 24020, The World Bank.
    7. repec:eee:jimfin:v:77:y:2017:i:c:p:18-38 is not listed on IDEAS
    8. Jaime Alonso-Carrera & Xavier Raurich, 2015. "Labor mobility, structural change and economic growth," UB Economics Working Papers 2015/325, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
    9. Claire H. Hollweg & Daniel Lederman & Diego Rojas & Elizabeth Ruppert Bulmer, 2014. "Sticky Feet : How Labor Market Frictions Shape the Impact of International Trade on Jobs and Wages," World Bank Publications, The World Bank, number 18777.

    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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