Trade liberalization and labor market dynamics
I study trade-induced transitional dynamics by estimating a structural dynamic equilibrium model of the Brazilian labor market. The model features a multi-sector economy with overlapping generations, heterogeneous workers, endogenous accumulation of sector-specific experience and costly switching of sectors. The model's estimates yield median costs of mobility ranging from 1.4 to 2.7 times annual average wages, but a high dispersion across the population. In addition, sector-specific experience is imperfectly transferable across sectors, leading to additional barriers to mobility. Using the estimated model for counter-factual trade liberalization experiments, the main findings are: (1) there is a large labor market response following trade liberalization but the transition may take several years; (2) potential aggregate welfare gains are significantly mitigated due to the delayed adjustment; (3) trade-induced welfare effects depend on initial sector of employment and on worker demographics. The experiments also highlight the sensitivity of the transitional dynamics with respect to assumptions regarding the mobility of capital.
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- A. Kerem Co?ar & Nezih Guner & James Tybout, 2016.
"Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy,"
American Economic Review,
American Economic Association, vol. 106(3), pages 625-663, March.
- Nezih Guner & James Tybout & A. Kerem Cosar, 2009. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," 2009 Meeting Papers 811, Society for Economic Dynamics.
- Cosar, A. Kerem & Guner, Nezih & Tybout, James, 2013. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," IZA Discussion Papers 7718, Institute for the Study of Labor (IZA).
- A. Kerem Co?ar & Nezih Guner & James Tybout, 2013. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," Working Papers 732, Barcelona Graduate School of Economics.
- A. Kerem Coşar & Nezih Guner & James Tybout, 2011. "Firm dynamics, job turnover, and wage distributions in an open economy," Working Papers 2011-06, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
- Cosar, Kerem & Guner, Nezih & Tybout, James R, 2013. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," CEPR Discussion Papers 9732, C.E.P.R. Discussion Papers.
- A. Kerem Coşar & Nezih Guner & James Tybout, 2010. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," NBER Working Papers 16326, National Bureau of Economic Research, Inc.
- Davidson, Carl & Martin, Lawrence & Matusz, Steven, 1999. "Trade and search generated unemployment," Journal of International Economics, Elsevier, vol. 48(2), pages 271-299, August. Full references (including those not matched with items on IDEAS)