Trade Shocks and Labor Adjustment: A Structural Empirical Approach

• Tác giả: Erhan Artuc
• Ngôn ngữ: eng
• Ký hiệu phân loại: 331.1 Labor force and market
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 323059
• Chủ đề: 1. Aggregate Human Capital E240; 2. Employment; 3. Intergenerational Income Distribution; 4. Unemployment; 5. Wages

Tóm tắt

 The welfare effects of trade shocks turn on the nature and magnitude of the costs workers face in moving between sectors. Using an Euler-type equilibrium condition derived from a rational expectations model of dynamic labor adjustment, we estimate the mean and variance of workers' switching costs from the US CPS. We estimate high values of both parameters, implying slow adjustment of the economy and sharp movements in wages in response to trade shocks. However, import-competing workers can still benefit from tariff removal
  liberalization lowers their wages in the short and long run but raises their option value.