Evaluation Labour Adjustment Costs From Trade Shocks
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Evaluation Labour Adjustment Costs From Trade Shocks Illustrations For The U S Economy Using An Applied General Equilibrium Model With Transactions
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Author : Ramon L. Clarete
language : en
Publisher:
Release Date : 1994
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 has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Evaluation Labour Adjustment Costs From Trade Shocks
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Author : Ramon L. Clarete
language : en
Publisher:
Release Date : 1994
Evaluation Labour Adjustment Costs From Trade Shocks written by Ramon L. Clarete and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with categories.
Evaluating Labour Adjustment Costs From Trade Shocks Illustrations For The U S Economy Using An Applied General Equilibrium Model With Transactions Costs
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Author : Ramon L. Clarete
language : en
Publisher:
Release Date : 1993
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 has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with categories.
Trade Adjustment Costs In Developing Countries
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Author : Guido Gustavo Porto
language : en
Publisher: Centre for Economic Policy Research
Release Date : 2010
Trade Adjustment Costs In Developing Countries written by Guido Gustavo Porto and has been published by Centre for Economic Policy Research this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Business & Economics categories.
This book summarizes the state of knowledge in the economic literature on trade and development regarding the costs of adjustment to trade openness and how adjustment takes place in developing countries. The contributions by leading experts look at: *the magnitude of trade adjustment costs in the presence of frictions in factor markets; *the impacts of trade shocks and greater trade openness; *the factors that affect the way trade, especially exports, adjust; *trade adjustment assistance programs in the U.S. and compensation schemes for farmers in the EU. The book will be relevant to academics, students, policy-makers and trade practitioners alike. Too often, policymakers avoid more open trade because they fear the adjustment costs, while proponents of such open trade overlook or dismiss them. This comprehensive set of papers takes these costs seriously and helps us appreciate where both sides go wrong. It provides an extremely useful survey of what we know and what we still need to know if the benefits from trade are to be more widespread within developing countries --Robert Lawrence, Albert L Williams Professor of International Trade Harvard Kennedy School.Trade expansion generates huge potential gains to developing countries, but it may also produce pains to specific socio-economic groups. This volume by world-renowned trade and labour experts offers the first comprehensive assessment of how trade adjustment takes place in developing countries, what its costs are and how policy can help mitigate them. As such it is an important and timely contribution to the debate on the costs and benefits of globalisation for developing countries.A --Andre Sapir, Professor of Economics, Solvay Brussels School of Economics and Management, and former Economic Advisor to the President of the European Commission
Sticky Feet
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Author : Claire H. Hollweg
language : en
Publisher: World Bank Publications
Release Date : 2014-06-26
Sticky Feet written by Claire H. Hollweg and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-06-26 with Business & Economics categories.
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.
Trade Shocks And Labor Adjustment
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Author : Erhan Artuc
language : en
Publisher:
Release Date : 2007
Trade Shocks And Labor Adjustment written by Erhan Artuc and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Commercial policy categories.
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 Investment Migration And Labour Market Adjustment
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Author : D. Greenaway
language : en
Publisher: Springer
Release Date : 2002-09-06
Trade Investment Migration And Labour Market Adjustment written by D. Greenaway and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-09-06 with Business & Economics categories.
Globalization and the growing integration of national markets have had profound effects on the operation of markets, not least labour markets. In this book, a range of leading commentators on globalization and labour markets present original contribution on the interaction between these two areas. This book assesses the impact of globalization on trade, cross-border investment and migration from both a theoretical and econometric standpoint and discusses the possible applications of this analysis for both industrialized and developing countries.
Evaluating Labour Adjustment Costs From Trade Shocks
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Author : Ramon L. Clarete
language : en
Publisher:
Release Date : 1994
Evaluating Labour Adjustment Costs From Trade Shocks written by Ramon L. Clarete and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Adjustment costs categories.
This paper presents a general equilibrium approach to calculating labour adjustment costs induced by trade policy changes or external sector shocks, which we illustrate by analyzing the adjustment consequences of eliminating quotas and tariffs on U.S. imports. In our approach, factor adjustments in the presence of transactions costs are endogenously determined within the equilibrium structure. The conventional way of calculating such labour adjustment costs is to use full equilibrium models which exclude adjustment costs, and apply exogenous estimates of duration of unemployment to implied intersectoral labour reallocations. By using an equilibrium model in which adjustment costs are absent, the conventional approach tends to overstate the amount of labour that moves to other sectors and hence introduces an upward bias to estimates of adjustment costs. As well, such an approach tends to ignore the impact on intersectoral wage rates. Our results suggest that concerns over adjustment problems should focus as much on the consequences of adjustment costs in impeding factor mobility, as on the magnitude of the adjustment costs themselves. Compared to the redistributive effects they induce by inhibiting labour movement in response to policy or other changes, these costs may be small.
Trade Shocks And Labor Adjustment
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Author : Stephen V. Cameron
language : en
Publisher:
Release Date : 2007
Trade Shocks And Labor Adjustment written by Stephen V. Cameron and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Commercial policy categories.
"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.
Essays In Labor Economics And International Trade
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Author : Moises Yi
language : en
Publisher:
Release Date : 2016
Essays In Labor Economics And International Trade written by Moises Yi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This dissertation employs tools from Labor Economics and International Trade to study how workers and labor markets adjust to economic shocks arising from trade liberalization and technological change. It contributes to the existing literature by studying several economic mechanisms that determine the magnitudes of these adjustments. The first chapter of this dissertation analyzes the roles that skill transferability and the local industry mix have on the adjustment costs of workers affected by negative trade shocks. Using rich administrative data from Germany, we construct novel measures of economic distance between sectors based on the notion of skill transferability. We combine these distance measures with sectoral employment shares in German regions to construct an index of labor market flexibility. This index captures the degree to which workers from a particular industry will be able to reallocate into other jobs. We then study the role of labor market flexibility on the effect of import shocks on the earnings and the employment outcomes of German manufacturing workers. Among workers living in inflexible labor markets, the difference between a worker at the 75th percentile of industry import exposure and one at the 25th percentile of exposure amounts to an earnings loss of roughly 11% of initial annual income (over a 10 year period). The earning losses of workers living in flexible regions are negligible. These findings are robust to controlling for a wide array of region level characteristics, including region size and overall employment growth. Our findings indicate that the industry composition of local labor markets plays an important role on the adjustment processes of workers. In the second chapter, we develop and apply a framework to quantify the effect of trade on aggregate welfare as well as the distribution of this aggregate effect across different groups of workers. The framework combines a multi-sector gravity model of trade with a Roy-type model of the allocation of workers across sectors. By opening to trade, a country gains in the aggregate by specializing according to its comparative advantage, but the distribution of these gains is unequal as labor demand increases (decreases) for groups of workers specialized in export-oriented (import-oriented) sectors. The model generalizes the specific-factors intuition to a setting with labor reallocation, while maintaining analytical tractability for any number of groups and countries. Our new notion of "inequality-adjusted" welfare effect of trade captures the full cross-group distribution of welfare changes in one measure, as the counterfactual scenario is evaluated by a risk-averse agent behind the veil of ignorance regarding the group to which she belongs. The quantitative application uses trade and labor allocation data across regions in Germany to compute the aggregate and distributional effects of a shock to trade costs or foreign technology levels. For the extreme case in which the country moves back to autarky we find that inequality-adjusted gains from trade are larger than the aggregate gains for both countries, as between-group inequality falls with trade relative to autarky, but the opposite happens for the shock in which China expands in the world economy. In the third chapter, we use detailed production data from a large Latin American garment manufacturer to study the process of technology adoption and resulting productivity changes within a firm. We find that the adoption of modern manufacturing techniques increases productivity through two channels, a direct effect and a spillover effect across adjacent production units. By exploiting the gradual introduction of new manufacturing techniques across independent production units, we estimate a direct effect on productivity of roughly 30%. We also estimate large spillovers to neighboring untreated units which amount to a 25% increase in productivity. Both of these effects accumulate slowly over time. The timing and the magnitudes of the estimated spillover effects corroborate qualitative evidence consistent with knowledge diffusion, learning and imitation.