Trade-Induced Job Turnover and Unemployment PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Trade-Induced Job Turnover and Unemployment PDF full book. Access full book title Trade-Induced Job Turnover and Unemployment by Hamid Firooz. Download full books in PDF and EPUB format.
Author: Hamid Firooz
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
This dissertation develops and estimates an open economy dynamic general equilibrium model to introduce and quantify a new mechanism through which openness influences productivity. The model features matching frictions in the labor market and endogenous demand elasticities in product markets. Because openness affects demand elasticities, it influences productivitythrough several channels. First, higher demand elasticities make firms'employment decisions more responsive to their idiosyncratic productivityshocks. This causes aggregate job turnover to rise, and thereby tends toraise unemployment. Second, this same increase in job turnover meansthat workers are moved more frequently from less to more efficient firms.Finally, to the extent that openness reduces the cross-firm dispersion inmarkups, it likewise tends to reduce the distortionary wedges between firms'marginal revenue products.Counterfactual analysis quantifies these trade-induced impacts on job turnover, unemployment, and labor misallocation. I show that a 10 percentage point reduction in import tariffs combined with a 12 percent reduction in the iceberg trade cost raises jobturnover and unemployment (in steady state) by roughly 7 and 12 percent,respectively. These effects would be almost four times smaller ifdemand elasticities were not allowed to respond to openness.
Author: Hamid Firooz
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
This dissertation develops and estimates an open economy dynamic general equilibrium model to introduce and quantify a new mechanism through which openness influences productivity. The model features matching frictions in the labor market and endogenous demand elasticities in product markets. Because openness affects demand elasticities, it influences productivitythrough several channels. First, higher demand elasticities make firms'employment decisions more responsive to their idiosyncratic productivityshocks. This causes aggregate job turnover to rise, and thereby tends toraise unemployment. Second, this same increase in job turnover meansthat workers are moved more frequently from less to more efficient firms.Finally, to the extent that openness reduces the cross-firm dispersion inmarkups, it likewise tends to reduce the distortionary wedges between firms'marginal revenue products.Counterfactual analysis quantifies these trade-induced impacts on job turnover, unemployment, and labor misallocation. I show that a 10 percentage point reduction in import tariffs combined with a 12 percent reduction in the iceberg trade cost raises jobturnover and unemployment (in steady state) by roughly 7 and 12 percent,respectively. These effects would be almost four times smaller ifdemand elasticities were not allowed to respond to openness.
Author: Carl Davidson
Publisher: W.E. Upjohn Institute
ISBN: 0880992743
Category : Business & Economics
Languages : en
Pages : 156
Get Book Here
Book Description
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40
Get Book Here
Book Description
This paper examines the effect of trade reform on wages and unemployment in a two-sector, three-good economy in which labor is imperfectly mobile across sectors. Wages in the export sector are set so as to minimize turnover costs. The analysis shows that a reduction in tariffs, coupled with an adjustment in lump-sum taxes to equilibrate the government budget, lowers wages in all production sectors in the short and the medium run but has an ambiguous effect on unemployment. Although employment and production of exportables expand in the medium run, the unemployment rate may rise or fall depending on whether the elasticity of wages in the export sector with respect to wages in the nontraded goods sector is lower or greater than unity. Potentially adverse effects may be mitigated in the long run, however, as a result of induced shifts in the structure of production activities.
Author: Pierre-Richard Agenor
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
Get Book Here
Book Description
This paper examines the effect of trade reform on wages and unemployment in a two-sector, three-good economy in which labor is imperfectly mobile across sectors. Wages in the export sector are set so as to minimize turnover costs. The analysis shows that a reduction in tariffs, coupled with an adjustment in lump-sum taxes to equilibrate the government budget, lowers wages in all production sectors in the short and the medium run but has an ambiguous effect on unemployment. Although employment and production of exportables expand in the medium run, the unemployment rate may rise or fall depending on whether the elasticity of wages in the export sector with respect to wages in the nontraded goods sector is lower or greater than unity. Potentially adverse effects may be mitigated in the long run, however, as a result of induced shifts in the structure of production activities.
Author: Steven J. Matusz
Publisher:
ISBN:
Category :
Languages : en
Pages : 60
Get Book Here
Book Description
A survey of more than 50 empirical papers shows that the adjustment costs of trade liberalization are small relative to the benefits. Moreover, manufacturing employment typically increases with trade liberalization. The limited data suggest that trade liberalization reduces poverty.Virtually all of the studies that quantify the adjustment costs of trade liberalization relative to the benefits point to the conclusion that adjustment costs are small in relation to the benefits of trade liberalization.The explanation for low adjustment costs is that: These costs are typically short term and end when workers find a job, but the benefits grow as the economy does. Unemployment doesn't last long, especially where workers' pay was not substantial in the original job. Normal labor turnover often exceeds job displacement from trade liberalization.Moreover, studies that examine the impact of trade liberalization on employment in developing countries find there is little decline - and usually an increase - in manufacturing employment in developing countries a year after trade liberalization, for three reasons: Developing countries tend to have comparative advantage in labor-intensive industries, and trade liberalization tends to favor labor. Interindustry shifts occur after trade liberalization, which minimizes the dislocation of factors of production. In many industries normal labor turnover exceeds dislocation from trade liberalization, so downsizing, when necessary, can be accomplished without much forced unemployment. Matusz and Tarr recommend a uniform tariff to minimize special-interest lobbying for protection since it diffuses the benefits of protection.This paper - a product of Trade, Development Research Group - is part of larger effort in the group to examine how trade liberalization affects growth and poverty reduction. David Tarr may be contacted at dtarr @worldbank.org.
Author: Heinrich Wiese
Publisher:
ISBN:
Category :
Languages : en
Pages : 74
Get Book Here
Book Description
Author: Steven Joseph Matusz
Publisher:
ISBN:
Category : Commercial policy
Languages : en
Pages : 38
Get Book Here
Book Description
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN: 1451854781
Category : Business & Economics
Languages : en
Pages : 98
Get Book Here
Book Description
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.
Author: Carl Davidson
Publisher: Princeton University Press
ISBN: 0691125597
Category : Business & Economics
Languages : en
Pages : 433
Get Book Here
Book Description
While most standard economic models of international trade assume full employment, Carl Davidson and Steven Matusz have argued over the past two decades that this reliance on full-employment modeling is misleading and ill-equipped to tackle many important trade-related questions. This book brings together the authors' pioneering work in creating models that more accurately reflect the real-world connections between international trade and labor markets. The material collected here presents the theoretical and empirical foundations of equilibrium unemployment modeling, which the authors and their collaborators developed to give researchers and policymakers a more realistic picture of how international trade affects labor markets, and of how transnational differences in labor markets affect international trade. They address the shortcomings of standard models, describe the empirics that underlie equilibrium unemployment models, and illustrate how these new models can yield vital insights into the relationship between international trade and employment. This volume also includes an indispensable general introduction as well as concise section introductions that put the authors' work in context and reveal the thinking behind their ideas. Economists are only now realizing just how important these ideas are, making this book essential reading for researchers and students.
Author:
Publisher: Springer
ISBN: 9783642332371
Category :
Languages : en
Pages : 124
Get Book Here
Book Description
