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Trade and Turnover: Theory and Evidence

Author

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  • Carl Davidson

    (Michigan State University)

  • Steven Matusz

    (Michigan State University)

Abstract

Is the pattern of trade correlated with cross-sector differences in job turnover? Theoretically, external shocks feed through to changes in domestic employment and cross-sector differences in turnover give rise to compensating wage differentials, which feed through to output prices. Using two different data sets on turnover, we find strong evidence that normalized US net exports by sector are negatively correlated with job destruction and worker separation rates. Weaker evidence suggests a positive correlation with between normalized net exports and job acquisition. Using sector-specific job destruction data for both Canada and the US, we find confirmation of the theoretical prediction that normalized net exports to Canada are negatively related to the ratio of the US job destruction rate to the Canadian job destruction rate.

Suggested Citation

  • Carl Davidson & Steven Matusz, 2005. "Trade and Turnover: Theory and Evidence," International Trade 0503009, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpit:0503009
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    References listed on IDEAS

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    Cited by:

    1. Haltiwanger, John & Kugler, Adriana & Kugler, Maurice & Micco, Alejandro & Pagés, Carmen, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Discussion Paper Series In Economics And Econometrics 0410, Economics Division, School of Social Sciences, University of Southampton.
    2. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.
    3. Nurmi, Satu, 2004. "Employment Dynamics and Openness to Trade in Finnish Manufacturing," Discussion Papers 956, The Research Institute of the Finnish Economy.
    4. Boulhol, Hervé, 2011. "Unemployment and relative labor market institutions between trading partners," Journal of International Economics, Elsevier, vol. 83(1), pages 83-91, January.
    5. Geishecker, Ingo, 2006. "The impact of international outsourcing on individual employment security: a micro level analysis," Discussion Papers 2006/17, Free University Berlin, School of Business & Economics.
    6. Giray Gozgor, 2017. "The Impact of Globalization on the Structural Unemployment: An Empirical Reappraisal," International Economic Journal, Taylor & Francis Journals, vol. 31(4), pages 471-489, October.
    7. Dutt, Pushan & Mitra, Devashish & Ranjan, Priya, 2009. "International trade and unemployment: Theory and cross-national evidence," Journal of International Economics, Elsevier, vol. 78(1), pages 32-44, June.
    8. Novella Bottini & Michael Gasiorek, 2009. "Trade and Job Reallocation: Evidence for Morocco," Working Papers 492, Economic Research Forum, revised Jun 2009.
    9. Geishecker, Ingo, 2008. "The impact of international outsourcing on individual employment security: A micro-level analysis," Labour Economics, Elsevier, vol. 15(3), pages 291-314, June.
    10. Lake, James & Millimet, Daniel L., 2016. "An empirical analysis of trade-related redistribution and the political viability of free trade," Journal of International Economics, Elsevier, vol. 99(C), pages 156-178.
    11. Fernando Mesa, 2011. "Labour market, international trade, and unemployment in a less developed country," Documentos de Trabajo 008908, Universidad del Rosario.
    12. Hasan, Rana & Mitra, Devashish & Ranjan, Priya & Ahsan, Reshad N., 2012. "Trade liberalization and unemployment: Theory and evidence from India," Journal of Development Economics, Elsevier, vol. 97(2), pages 269-280.
    13. Mine Z. Senses, 2017. "International trade and economic insecurity," IZA World of Labor, Institute of Labor Economics (IZA), pages 364-364, May.
    14. Peter Egger & David Greenaway & Tobias Seidel, 2011. "Rigid labour markets with trade and capital mobility: theory and evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 44(2), pages 509-540, May.
    15. Koffi Kpognon & Henri Atangana Ondoa & Mamadou Bah & Marie Fanny Messe, 2020. "Ouverture commerciale, institutions du marché du travail et emploi des jeunes en Afrique," African Development Review, African Development Bank, vol. 32(S1), pages 91-105, November.
    16. Jose Luis Groizard & Priya Ranjan & Jose Antonio Rodriguez-Lopez, 2013. "Offshoring, Exporting, and Jobs," Working Papers 121312, University of California-Irvine, Department of Economics.
    17. Bernard Hoekman & Alan L. Winters, 2005. "Trade and Employment: Stylized Facts and Research Findings," Working Papers 7, United Nations, Department of Economics and Social Affairs.
    18. repec:smu:ecowpa:1405 is not listed on IDEAS
    19. Taruna Shalini RAMESSUR & Sanjeev K SOBHEE, 2009. "Impact Of Trade Liberalisation On Labour Conditions On The Textile Sector Of Mauritius: The Fate Of Female Workers," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(2).
    20. Lurweg, Maren & Uhde, Nicole, 2010. "International trade and individual labour market perspectives: A micro-level analysis of German manufacturing workers," CAWM Discussion Papers 31, University of Münster, Center of Applied Economic Research Münster (CAWM).
    21. Hervé Boulhol, 2010. "Unemployment and relative labor market institutions between trading partners," Post-Print halshs-00544010, HAL.

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    More about this item

    Keywords

    Job Creation; Job Destruction; Trade; Labor;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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