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

  • Néstor Gandelman
  • Carlos Casacuberta
  • Gabriela Fachola

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

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Paper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 97.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:latm04:97
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  1. Steven G. Allen, 1986. "Unions and Job Security in the Public Sector," NBER Working Papers 2108, National Bureau of Economic Research, Inc.
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