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The Impact of Trade Liberalization on Employment, Capital and Productivity Dynamics:

Author

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  • Néstor Gandelman
  • Carlos Casacuberta
  • Gabriela Fachola

Abstract

This paper studies the impact of trade liberalization on labor and capital gross flows and productivity in the Uruguayan Manufacturing Sector. Uruguay opened its economy in the presence of strong –at least initially- unions and structural different industry concentration levels. Higher international exposure implied a slightly higher job creation and an important increase in job and capital destruction. Unions were able to ameliorate this effect. Although not associated with higher creation rates, unions were effective in reducing job and capital destruction. Industry concentration also was found to mitigate the destruction of jobs but had no effect on job creation nor in capital dynamics. The changes in the use of labor and capital brought an increase in total factor productivity specially in sectors where tariff reductions were larger and unions were not present. We found no evidence of varying productivity dynamics across different industry concentration levels

Suggested Citation

  • Néstor Gandelman & Carlos Casacuberta & Gabriela Fachola, 2004. "The Impact of Trade Liberalization on Employment, Capital and Productivity Dynamics:," Econometric Society 2004 Latin American Meetings 97, Econometric Society.
  • Handle: RePEc:ecm:latm04:97
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    File URL: http://repec.org/esLATM04/up.20831.1081391897.pdf
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    References listed on IDEAS

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    1. Steven G. Allen, 1988. "Unions and Job Security in the Public Sector," NBER Chapters,in: When Public Sector Workers Unionize, pages 271-304 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Daniel Lederman & Marcelo Olarreaga & Guillermo E. Perry, 2009. "China's and India's Challenge to Latin America : Opportunity or Threat?," World Bank Publications, The World Bank, number 2591.
    2. Eduardo Lora & Johanna Fajardo-González, 2016. "Employment and taxes in Latin America: An empirical study of the effects of payroll, corporate income and value-added taxes on labor outcomes," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, pages 75-117.
    3. Gutiérrez, Gabriel, 2005. "Ex-post evaluation of the employment effects of a preferential trade agreement: methodological issues, illustrated with a reference to Chile," Comercio Internacional 57, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Gianmarco I.P. Ottaviano, 2005. "National Disparities and Regional Allocation of Resources: A Positive Framework," IDB Publications (Working Papers) 2922, Inter-American Development Bank.

    More about this item

    Keywords

    job creation; job destruction; total factor productivity;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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