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Trade Liberalization and Employment Effects in Ukraine

  • Christev, Atanas

    ()

    (Heriot-Watt University, Edinburgh)

  • Kupets, Olga

    ()

    (National University of Kiev-Mohyla Academy)

  • Lehmann, Hartmut

    ()

    (University of Bologna)

This paper addresses the important issue of the effects of trade liberalization on labor market job flows. It studies the case of Ukraine where we view the sudden openness of the economy to trade as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows taking account of shifting trade patterns after the disintegration of CMEA trade regime. We provide some first evidence that three-digit NACE sector job flows are predominantly driven by idiosyncratic factors within industries. Other things equal, there is increased labor shedding as larger non-state share in industry relates to less job creation and more job destruction. Trade openness does affect job flows in Ukrainian manufacturing disproportionately according to trade orientation. We find that while trade with CIS decreases job destruction, trade with the EU increases excess reallocation mainly through job creation.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1826.

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Length: 34 pages
Date of creation: Oct 2005
Date of revision:
Publication status: published in: Comparative Economic Studies, 2008, 50 (2), 318-340
Handle: RePEc:iza:izadps:dp1826
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