Trade Shocks And Labor Adjustment

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Trade Shocks and Labor Adjustment

Author : Erhan Artuc
Publisher :
ISBN 13 :
Total Pages : 64 pages
Book Rating : 4.0/5 ( download)

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Book Synopsis Trade Shocks and Labor Adjustment by : Erhan Artuc

Download or read book Trade Shocks and Labor Adjustment written by Erhan Artuc and published by . This book was released on 2007 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: The welfare effects of trade shocks depend crucially on the nature and magnitude of the costs workers face in moving between sectors. The existing trade literature does not directly address this, assuming perfect mobility or complete immobility, or adopting reduced-form approaches to estimation. We present a model of dynamic labor adjustment that does, and which is, moreover, consistent with a key empirical fact: that intersectoral gross flows greatly exceed net flows. Using an Euler-type equilibrium condition, we estimate the mean and the variance of workers' switching costs from the U.S. March Current Population Surveys. We estimate high values of both parameters, implying both slow adjustment of the economy, and sharp movements in wages, in response to a trade shock. Simulations of a trade liberalization indicate that despite the high estimated adjustment cost, in terms of lifetime welfare, the liberalization is Pareto-improving. The explanation for this surprising finding -- which would be missed by a reduced-form approach -- is that the high variance to costs ensures high rates of gross flow; this helps spread the liberalization's benefits around.

Trade Shocks and Labor Adjustment

Author : Stephen V. Cameron
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.0/5 ( download)

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Book Synopsis Trade Shocks and Labor Adjustment by : Stephen V. Cameron

Download or read book Trade Shocks and Labor Adjustment written by Stephen V. Cameron and published by . This book was released on 2007 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: "We construct a dynamic, stochastic rational expectations model of labor reallocation within a trade model that is designed so that its key parameters can be estimated for trade policy analysis. A key feature is the presence of time-varying idiosyncratic moving costs faced by workers. As a consequence of these shocks: (i) Gross flows exceed net flows (an important feature of empirical labor movements); (ii) the economy features gradual and anticipatory adjustment to aggregate shocks; (iii) wage differentials across locations or industries can persist in the steady state; and (iv) the normative implications of policy can be very different from a model without idiosyncratic shocks, even when the aggregate behaviour of both models is similar. It is shown that the equilibrium solves a particular planner's problem, thus facilitating analytical results, econometric estimation, and simulation of the model for policy analysis"--National Bureau of Economic Research web site.

Sticky Feet

Author : Claire H. Hollweg
Publisher : World Bank Publications
ISBN 13 : 1464802637
Total Pages : 123 pages
Book Rating : 4.4/5 (648 download)

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Book Synopsis Sticky Feet by : Claire H. Hollweg

Download or read book Sticky Feet written by Claire H. Hollweg and published by World Bank Publications. This book was released on 2014-07-03 with total page 123 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report quantifies labor mobility costs in developing countries and simulates the implied adjustment paths of employment and wages following a change in trade policy. High mobility costs are shown to reduce the potential gains to trade reform.

Sticky Feet

Author : Claire H. Hollweg
Publisher : World Bank Publications
ISBN 13 : 1464802645
Total Pages : 123 pages
Book Rating : 4.4/5 (648 download)

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Book Synopsis Sticky Feet by : Claire H. Hollweg

Download or read book Sticky Feet written by Claire H. Hollweg and published by World Bank Publications. This book was released on 2014-06-26 with total page 123 pages. Available in PDF, EPUB and Kindle. Book excerpt: The analysis in this report confirms the findings of previous studies that trade liberalization improves aggregate welfare and is in the long run associated with higher employment and wages. The analysis addresses a major gap in the literature, which has heretofore provided limited evidence about the trade-related adjustment costs faced by workers in developing countries and how they are affected by mobility costs. Labor market frictions reduce the potential gains from trade reform. For a tariff reduction in a given sector, the resulting change in relative prices raises real wages in some sectors and reduces them in the liberalized sector. The emerging wage gaps lead to labor reallocation. But workers typically incur costs to change jobs; the higher the mobility costs, the slower the transition to the new labor market steady state. Workers’ sticky feet result in foregone welfare gains from trade. This report presents an estimation strategy for capturing mobility costs when only net flows of workers between industries are observed, generating cross-country estimates for 47 developed and developing countries. The basic analytical approach is then refined to take advantage of micro-level data on worker transitions and wages when gross flows can be observed to derive mobility cost estimates that account for sector and formality status. These cost estimates are used to model the dynamic paths of labor reallocation between sectors and in and out of the labor force, the associated wage paths, and the resulting labor adjustment costs. The main findings of the report are that: labor mobility costs in developing countries are high; foregone trade gains due to frictions in labor mobility can also be substantial; workers bear the brunt of adjustment costs; mobility costs and labor market adjustments to trade-related shocks vary by industry, firm type, and worker type; entry costs are significantly higher for formal than for informal employment; trade reforms increase economy-wide wages and employment; and workers displaced by plant closings are likely to face relatively long adjustment periods. The findings provide insights that could be helpful to policymakers hoping to mitigate negative short-term consequences of trade liberalization and facilitate labor adjustment.

Patterns of Labor Market Adjustment to Trade Shocks with Imperfect Capital Mobility

Author : Erhan Artuc
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (128 download)

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Book Synopsis Patterns of Labor Market Adjustment to Trade Shocks with Imperfect Capital Mobility by : Erhan Artuc

Download or read book Patterns of Labor Market Adjustment to Trade Shocks with Imperfect Capital Mobility written by Erhan Artuc and published by . This book was released on with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores how different investment frictions affect the patterns of responses of labor markets to tariff cuts. To investigate these patterns, this paper formulates a multi-sector dynamic model featuring capital and labor adjustment costs that is fitted to Argentine data. Counterfactual simulations of a tariff decline in the textile sector are used to show that capital adjustment can create long-run responses of real wages that are larger than the short-run responses. This happens as textile firms disinvest during the transition. This paper also shows that the reduction of tariffs on capital inputs boosts investment and real wages across sectors. This paper assesses the nature of capital adjustment costs, including fixed, convex, and irreversibility costs in determining these patterns of labor market responses to trade reforms.

The China Shock

Author :
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (944 download)

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Book Synopsis The China Shock by :

Download or read book The China Shock written by and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Globalization, Trade Imbalances and Labor Market Adjustment

Author : Rafael Dix-Carneiro
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (123 download)

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Book Synopsis Globalization, Trade Imbalances and Labor Market Adjustment by : Rafael Dix-Carneiro

Download or read book Globalization, Trade Imbalances and Labor Market Adjustment written by Rafael Dix-Carneiro and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multi-country, multi-sector model of trade with two key ingredients: (a) Consumption-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances; (b) labor market frictions across and within sectors, leading to unemployment dynamics and sluggish transitions to shocks. We use the estimated model to study the behavior of labor markets in response to globalization shocks, including shocks to technology, trade costs, and inter-temporal preferences (savings gluts). We find that modeling trade imbalances changes both qualitatively and quantitatively the short- and long-run implications of globalization shocks for labor reallocation and unemployment dynamics. In a series of empirical applications, we study the labor market effects of shocks accrued to the global economy, their implications for the gains from trade, and we revisit the "China Shock" through the lens of our model. We show that the US enjoys a 2.2% gain in response to globalization shocks. These gains would have been 73% larger in the absence of the global savings glut, but they would have been 40% smaller in a balanced-trade world.

The Labor Market and Economic Adjustment

Author : Pierre-Richard Agénor
Publisher : International Monetary Fund
ISBN 13 : 1451854781
Total Pages : 98 pages
Book Rating : 4.4/5 (518 download)

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Book Synopsis The Labor Market and Economic Adjustment by : Pierre-Richard Agénor

Download or read book The Labor Market and Economic Adjustment written by Pierre-Richard Agénor and published by International Monetary Fund. This book was released on 1995-11-01 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the role of the labor market in the transmission process of adjustment policies in developing countries. It begins by reviewing the recent evidence regarding the functioning of these markets. It then studies the implications of wage inertia, nominal contracts, labor market segmentation, and impediments to labor mobility for stabilization policies. The effect of labor market reforms on economic flexibility and the channels through which labor market imperfections alter the effects of structural adjustment measures are discussed next. The last part of the paper identifies a variety of issues that may require further investigation, such as the link between changes in relative wages and the distributional effects of adjustment policies.

Labor markets in an era of adjustment : an overview

Author : Susan Horton
Publisher : World Bank Publications
ISBN 13 : 9780821326817
Total Pages : 584 pages
Book Rating : 4.3/5 (268 download)

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Book Synopsis Labor markets in an era of adjustment : an overview by : Susan Horton

Download or read book Labor markets in an era of adjustment : an overview written by Susan Horton and published by World Bank Publications. This book was released on 1994 with total page 584 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Trade Adjustment

Author : David H. Autor
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (853 download)

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Book Synopsis Trade Adjustment by : David H. Autor

Download or read book Trade Adjustment written by David H. Autor and published by . This book was released on 2013 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the past two decades, China's manufacturing exports have grown spectacularly, U.S. imports from China have surged, but U.S. exports to China have increased only modestly. Using representative, longitudinal data on individual earnings by employer, we analyze the effect of exposure to import competition on earnings and employment of U.S. workers over 1992 through 2007. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings and are at elevated risk of exiting the labor force and obtaining public disability benefits. They spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, low attachment to the labor force, and those employed at large firms with low wage levels. Import competition also induces substantial job churning among high-wage workers, but they are better able than low-wage workers to move across employers with minimal earnings losses, and are less likely to leave their initial firm during a mass layoff. These findings, which are robust to a large set of worker, firm and industry controls, and various alternative measures of trade exposure, reveal that there are significant worker-level adjustment costs to import shocks, and that adjustment is highly uneven across workers according to their conditions of employment in the pre-shock period. Keywords: Trade Flows, Labor Demand, Earnings, Job Mobility, Social Security Programs. JEL Classification: F16, H55, J23, J31, J63.

Trade Shocks and Factor Adjustment Frictions

Author :
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (931 download)

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Book Synopsis Trade Shocks and Factor Adjustment Frictions by :

Download or read book Trade Shocks and Factor Adjustment Frictions written by and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

A Noteon Terms of Trade Shocks and the Wage Gap

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1455210862
Total Pages : 29 pages
Book Rating : 4.4/5 (552 download)

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Book Synopsis A Noteon Terms of Trade Shocks and the Wage Gap by : International Monetary Fund

Download or read book A Noteon Terms of Trade Shocks and the Wage Gap written by International Monetary Fund and published by International Monetary Fund. This book was released on 2010-12-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using Chilean data, we document that for resource-rich small open economies the effects of terms of trade shocks on the wage gap (between skilled and unskilled workers) depend on factor intensities in the non-tradable sector, following the model in Galiani, Heymann, and Magud (2010). For a skilled-intensive non-tradable sector we show that improvements in the terms of trade benefit skilled workers. We also show that this relation holds at the industry level: the wage gap widens in skilled-intensive sectors while it shrinks in unskilled-intensive ones, the more so as terms of trade volatility decreases.

Terms of Trade Shocks, Labor-Market Adjustment and Safeguard Measures

Author : James D. Gaisford
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Terms of Trade Shocks, Labor-Market Adjustment and Safeguard Measures by : James D. Gaisford

Download or read book Terms of Trade Shocks, Labor-Market Adjustment and Safeguard Measures written by James D. Gaisford and published by . This book was released on 2001 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores a simple model of labor market adjustment where inter-sectoral transfer in response to terms of trade shocks involves both sector-specific skill acquisition and workplace disruption. Externalities arise because the marginal migrant does not consider the congestion costs imposed on intra-marginal migrants or the disruption costs imposed on the incumbent workers in both sectors. While these externalities give rise to a case for temporary adjustment assistance, the analysis does not support the use of trade measures such as tariffs.

Evaluation Labour Adjustment Costs from Trade Shocks Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions..

Download Evaluation Labour Adjustment Costs from Trade Shocks Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions.. PDF Online Free

Author : Ramon L. Clarete
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (859 download)

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Book Synopsis Evaluation Labour Adjustment Costs from Trade Shocks Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions.. by : Ramon L. Clarete

Download or read book Evaluation Labour Adjustment Costs from Trade Shocks Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions.. written by Ramon L. Clarete and published by . This book was released on 1994 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Labor Markets in an Era of Adjustment: Issues papers

Author : Susan Horton
Publisher :
ISBN 13 :
Total Pages : 404 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Labor Markets in an Era of Adjustment: Issues papers by : Susan Horton

Download or read book Labor Markets in an Era of Adjustment: Issues papers written by Susan Horton and published by . This book was released on 1994 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Essays on Trade Shocks and Local Labor Markets

Author : Chan Yu
Publisher :
ISBN 13 :
Total Pages : 288 pages
Book Rating : 4.:/5 (125 download)

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Book Synopsis Essays on Trade Shocks and Local Labor Markets by : Chan Yu

Download or read book Essays on Trade Shocks and Local Labor Markets written by Chan Yu and published by . This book was released on 2020 with total page 288 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first two chapters of the dissertation study how local labor market adjusts to trade shocks. The last chapter explores the relationship between economic condition change and health outcomes. In what follows, I describe my three essays. The first chapter proposes a mechanism through which local labor markets adjust to trade shocks: immigrants’ mobility. I find that immigrants are more responsive than natives to trade shocks. A $1000 increase in the import exposure leads to a 2.6 percent decline in the immigrant population but has little change in the native population. Additionally, immigrant mobility reduces the negative effects of trade shocks on native employment and wages. The study ultimately shows that natives in areas with more immigrants experience smaller declines in employment and wages. The second chapter studies the disparate impacts of trade liberalization on U.S. workers according to gender and age. Focusing on US-China trade shocks that occurred between 1990-2007, I show that these trade shocks generated larger declines in manufacturing employment and wages for older women than for older men. In contrast to prior studies, I find that discrimination and gender differences in industrial employment play relatively small roles in explaining this pattern. Instead, I present evidence that women's career interruptions from marriage and motherhood provide a more promising explanation. Within an age cohort, trade shocks depress labor market outcomes more strongly for married women with children than their male counterparts. The last chapter estimates the impact on infant birth outcomes of the farm credit crisis that hit the U.S. Midwest in the 1980s. Exploiting county-level variation in agricultural loans before the crisis, I use a difference-in-differences methodology to show that counties with more pre-existing farmland loans (per acre) experienced relatively worse infant health outcomes as the crisis unfolded. My estimates indicate that a $100 dollar increase in farmland loan (per acre) increased the incidence of low birth weight by around 0.4 percentage points and reduced the birth weight by 19 grams. Other findings show that the credit crisis intensified financial distress and tightened financial constraints for affected households, economic pressures that potentially provide a mechanism for the impact on birth outcomes. Counties that had purchased more farmland prior to the crisis suffered larger declines in their farm earnings, higher delinquency rates, and more bank failures

Evaluating Labour Adjustment Costs from Trade Shocks: Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions Costs

Download Evaluating Labour Adjustment Costs from Trade Shocks: Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions Costs PDF Online Free

Author : Ramon L. Clarete
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (848 download)

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Book Synopsis Evaluating Labour Adjustment Costs from Trade Shocks: Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions Costs by : Ramon L. Clarete

Download or read book Evaluating Labour Adjustment Costs from Trade Shocks: Illustrations for the U.S. Economy Using an Applied General Equilibrium Model with Transactions Costs written by Ramon L. Clarete and published by . This book was released on 1993 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: