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Are workers more vulnerable in tradable industries?

Author

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  • Eliasson, Kent

    () (Growth Analysis and Department of Economics, Umeå University)

  • Hansson, Pär

    () (Uppsala Center for Labor Studies)

Abstract

Reduced trade barriers and lower costs of transportation and information have meant that a growing part of the economy has been exposed to international trade. In particular, this is the case in the service sector. We divide the service sector into a tradable and a non-tradable part using an approach to identify tradable industries developed by Jensen and Kletzer (2006). We examine whether the probability of displacement is higher and income losses after displacement greater for workers in tradable services and manufacturing (tradable) than in non-tradable services. We also analyze whether the probability of re-employment is higher for workers displaced from tradable services and manufacturing than from non-tradable services. We find that in the 2000s the probability of displacement is relatively high in tradable services in comparison to non-tradable services and manufacturing. On the other hand, the probability of re-employment is higher for those displaced from tradable services. The largest income losses are found for those who had been displaced from manufacturing. Interestingly, the income losses of those displaced from manufacturing seems mainly to be due to longer spells of non-employment, whereas for those displaced in tradable services lower wages in their new jobs compared to their pre-displacement jobs appears to play a larger role.

Suggested Citation

  • Eliasson, Kent & Hansson, Pär, 2013. "Are workers more vulnerable in tradable industries?," Working Paper Series, Center for Labor Studies 2013:16, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uulswp:2013_016
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    References listed on IDEAS

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    Cited by:

    1. Bodart, Vincent & Carpantier, Jean-François, 2016. "Real exchange rates and skills," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 305-319.
    2. Philippe Frocrain & Pierre-Noël Giraud, 2017. "The evolution of tradable and non-tradable employment: evidence from France," Working Papers hal-01695159, HAL.
    3. Tuhkuri, Joonas, 2016. "Globalization Threatens One Quarter of Finnish Employment," ETLA Brief 46, The Research Institute of the Finnish Economy.

    More about this item

    Keywords

    displacement COSTs; re-employment; earnings losses; tradable services;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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