Trade Shocks and Labor Adjustment: A Structural Empirical Approach

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 cos...

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Main Authors:	Artuc, Erhan, Chaudhuri, Shubham, McLaren, John
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Employment Unemployment Wages Intergenerational Income Distribution Aggregate Human Capital E240 Trade Policy International Trade Organizations F130 Trade and Labor Market Interactions F160
Online Access:	http://hdl.handle.net/10986/4714

id	okr-10986-4714
recordtype	oai_dc
spelling	okr-10986-47142021-04-23T14:02:19Z Trade Shocks and Labor Adjustment: A Structural Empirical Approach Artuc, Erhan Chaudhuri, Shubham McLaren, John Employment Unemployment Wages Intergenerational Income Distribution Aggregate Human Capital E240 Trade Policy International Trade Organizations F130 Trade and Labor Market Interactions F160 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. 2012-03-30T07:29:22Z 2012-03-30T07:29:22Z 2010 Journal Article American Economic Review 00028282 http://hdl.handle.net/10986/4714 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Employment Unemployment Wages Intergenerational Income Distribution Aggregate Human Capital E240 Trade Policy International Trade Organizations F130 Trade and Labor Market Interactions F160
spellingShingle	Employment Unemployment Wages Intergenerational Income Distribution Aggregate Human Capital E240 Trade Policy International Trade Organizations F130 Trade and Labor Market Interactions F160 Artuc, Erhan Chaudhuri, Shubham McLaren, John Trade Shocks and Labor Adjustment: A Structural Empirical Approach
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	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.
format	Journal Article
author	Artuc, Erhan Chaudhuri, Shubham McLaren, John
author_facet	Artuc, Erhan Chaudhuri, Shubham McLaren, John
author_sort	Artuc, Erhan
title	Trade Shocks and Labor Adjustment: A Structural Empirical Approach
title_short	Trade Shocks and Labor Adjustment: A Structural Empirical Approach
title_full	Trade Shocks and Labor Adjustment: A Structural Empirical Approach
title_fullStr	Trade Shocks and Labor Adjustment: A Structural Empirical Approach
title_full_unstemmed	Trade Shocks and Labor Adjustment: A Structural Empirical Approach
title_sort	trade shocks and labor adjustment: a structural empirical approach
publishDate	2012
url	http://hdl.handle.net/10986/4714
_version_	1764392489019506688

Trade Shocks and Labor Adjustment: A Structural Empirical Approach

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