Hollweg, Claire H.
Macroeconomics, Trade, and Investment Global Practice
Author Name Variants
Fields of Specialization
International trade, Global value chains, Services, Labor markets, Development economics
Macroeconomics, Trade, and Investment Global Practice
Externally Hosted Work
Last updated January 31, 2023
Claire H. Hollweg is a senior economist with the Macroeconomics, Trade, and Investment Global Practice of the World Bank. Before studying economics, she worked as a journalist. She has worked with the government of South Australia and the Pacific Economic Cooperation Council in Singapore. Her research interests include development economics, with a focus on the nexus between trade, labor markets, servicification of manufacturing, and upgrading in global value chains. She holds a PhD and an MA in economics from the University of Adelaide.
Publication Search Results
Now showing 1 - 10 of 12
Publication(Washington, DC: World Bank, 2014-06-17) Hollweg, Claire H. ; Lederman, Daniel ; Rojas, Diego ; Ruppert Bulmer, ElizabethThis report analyzes the paths by which developing country labor markets adjust to permanent trade-related shocks. Trade shocks can bring about reallocation of labor between industries, but the presence of labor mobility costs implies economy-wide losses because they extend the period of economic adjustment. This report focuses primarily on the adjustment costs faced by workers after a trade shock, because of magnitude and welfare implications and policy relevance. From a policy viewpoint, understanding the relative magnitudes of labor mobility and adjustment costs can help policymakers design trade policies that are consistent with employment objectives, can be complemented by labor policies, or support programs to facilitate labor transitions, or both. To complement and validate the analysis based on structural choice models, the study designed a distinct empirical approach using reduced-form econometric estimation strategies. This approach examines the impact of structural reforms and worker displacement on labor market outcomes. This makes it possible to estimate the time required to adjust to a trade-related shock, but does not assume the rigid underlying relationship inherent in structural models. This report is organized as follows: chapter one gives introduction. Chapter two presents evidence from the literature on the relative magnitude of labor adjustment costs borne by workers and by firms. Chapter three presents a new database of country-level labor mobility cost estimates for both developing and developed economies. Chapter four showcases country case studies in which labor mobility costs vary by industry, firm size, and worker type (for example, informal versus. formal). Chapter five analyzes the impact of structural reforms on aggregate labor market outcomes across countries and the effect of worker displacement due to plant closings on the employment outcomes of individual workers in Mexico. Chapter six concludes with a summary of the main findings about the labor adjustment costs associated with trade-related shocks and a discussion of policy responses internationally.
Publication(World Bank Group, Washington, DC, 2014-11) Hollweg, Claire H. ; Lederman, Daniel ; Mitra, DevashishThis paper explores the impact of structural reforms on a comprehensive set of macro-level labor-market outcomes, including the unemployment rate, the average wage index, and overall and female employment levels and labor force participation rates. Together these outcome variables capture the overall health of the labor market and the aggregate welfare of workers. Yet, there seems to be no other comprehensive empirical investigation in the existing literature of the impact of structural reforms at the cross-country macro level on labor-market outcomes other than the unemployment rate. Data were collected from a variety of sources, including the World Bank World Development Indicators, the International Monetary Fund International Financial Statistics, and the International Labor Organization Key Indicators of the Labor Market. The resulting dataset covers up to 88 countries, the majority being developing, for 10 years on either side of structural reforms that took place between 1960 and 2001. After documenting the average trends across countries in the labor-market outcomes up to 10 years on either side of each country s structural reform year, the authors run fixed-effects ordinary least squares as well as instrumental variables regressions to account for the likely endogeneity of structural reforms to labor-market outcomes. Overall the results suggest that structural reforms lead to positive outcomes for labor. Unlike related literature, the paper does not find conclusive evidence on unemployment. Redistributive effects in favor of workers, along the lines of the Stolper-Samuelson effect, may be at work.
Publication(World Bank, Washington, DC, 2015-06) Cali, Massimiliano ; Hollweg, Claire H. ; Ruppert Bulmer, ElizabethIncreasing the trade integration of developing countries can make a vital contribution to boosting shared prosperity, but it also exposes producers and consumers to exogenous shocks that alter relative prices, sometimes positively and sometimes negatively. This paper discusses the short-run effects of trade-related shocks on households to capture the potential welfare impact on the poor. The discussion explores the channels through which trade shocks are transmitted to households in the bottom of the income distribution, namely through consumption, household production, and market-based labor activities. The degree to which price shocks are passed through from borders to point of sale is a key determinant of the gains from trade and the ultimate welfare impact. Trade changes in agriculture directly affect households through their consumption basket. Lower agricultural prices reduce the cost of consumables, but these welfare gains may be offset by lower earnings for households that produce these same goods. Poorer households tend to be net consumers of agricultural products, suggesting a net welfare gain, but agricultural wage workers could suffer from wage cuts. Because poorer households tend to consume relatively fewer nonagricultural products, that is nonessentials, any trade-related shocks to prices of nonagricultural product are likely to be transmitted via labor channels. Despite significant evidence that nonagricultural trade reform ultimately leads to job creation and enhanced productivity, the short-run effects can be mixed. The costs incurred by workers to transition to new jobs slow the adjustment of the economy to a new steady state. Labor mobility costs, which tend to be higher in developing countries and for unskilled workers, reduce the potential gains to trade by diverting labor market adjustment from its most efficient path.
Publication(World Bank, Washington, DC, 2015-01) Calì, Massimiliano ; Hollweg, ClaireThe LACEX dataset has been recently assembled to compute the (direct and indirect) value of the compensation of employees linked to exports for each sector/country/year. The data has been computed on the basis of a panel of global input-output data spanning intermittent years from 1995 to 2007 from the Global Trade Analysis Project (GTAP). This represents a form of social accounting data - a variation on the social accounting matrix (SAM) where incomes are shown in the rows of the SAM while expenditures are shown in the columns. The structure of the data provides a comprehensive and consistent record of national income accounting relationships between different sectors and regions, including intermediate and final demand linkages. This structure of the dataset allows one to obtain the value added content of final output and exports, including its compensation of employees’ component. That includes both the direct and indirect compensation, based on the backward linkages of each sector with the rest of the economy. In order to obtain these labor value added measures, two intermediate multiplier matrixes need to be calculated. The first is the Leontief inverse matrix, which measures the inputs contained in a unit of final output. This matrix contains both direct and indirect inputs. Next, one needs to calculate a matrix which has the compensation of employees’ shares of total output. Using these two matrixes as multipliers one can obtain the compensation of employees’ shares of exports and final outputs. These shares are also split between skilled and unskilled workers.
Publication(World Bank, Washington, DC, 2016-03) Cali, Massimiliano ; Francois, Joseph ; Hollweg, Claire H. ; Manchin, Miriam ; Oberdabernig, Doris Anita ; Rojas-Romagosa, Hugo ; Rubinova, Stela ; Tomberger, PatrickThis paper develops a novel methodology to measure the quantity of jobs and value of wages embodied in exports for a large number of countries and sectors for intermittent years between 1995 and 2011. The resulting Labor Content of Exports database allows the examination of the direct contribution of labor to exports as well as the indirect contribution via other sectors of the economy for skilled and unskilled labor. The analysis of the new data sets documents several new findings. First, the global share of labor value added in exports has been declining globally since 1995, but it has increased in low-income countries. Second, in line with the standard Hecksher-Ohlin trade model, the composition of labor directly contained in exports is skewed toward skilled labor in high-income countries relative to developing countries. However, that is not the case for the indirect labor content of exports. Third, manufacturing exports are a key source of labor demand in other sectors, especially in middle- and low-income countries. And the majority of the indirect demand for labor spurred by exports is in services sectors, whose workers are the largest beneficiaries of exporting activities globally. Fourth, differences in the labor value added in exports share across developing countries appears to be driven more by differences in the composition of exports rather than in sector labor intensities. Finally, average wages typically increase rapidly enough with the process of economic development to more than compensate the loss in jobs per unit of exports. The paper also includes the necessary information to build the Labor Content of Exports database from the original raw data, including stata do-files and matlab files, as well as descriptions of the variables in the data set.
Publication(World Bank, Washington, DC, 2020-10) Hollweg, Claire H. ; Ong Lopez, AnneUsing firm-level data for Georgia, the paper estimates the quasi-elasticity of employment and wages with respect to the share of exports in total sales, to explore whether changes in the structure of sales (exporting versus selling to the domestic market) matter for labor market outcomes. The methodology uses exogenous fluctuations in exchange rates combined with firms' initial exposure to various markets as instrumental variables to identify a causal effect. The results differentiate employment levels and average wages by gender and consider whether export destination or the competiveness of economies matters for the magnitude of this elasticity. The data are from the National Statistics Office of Georgia Statistics Survey of Enterprises merged with customs data for 2006-17. The instrumental variables regression results show that the act of exporting improves female employment but reduces overall average wages and female wages. Increasing exports to the European Union as well as high-income countries drives this positive result for female employment, whereas exporting to upper-middle-income countries is found to have a negative relationship with female employment.
Publication(World Bank, Washington, DC, 2019-09) Cali, Massimiliano ; Hidayat, Taufik ; Hollweg, Claire H.The ability of workers to transition to a new job is crucial to determine the resilience of an economy to (positive or negative) shocks. This paper provides new evidence on the factors that affect labor mobility by using labor data on Indonesia, one of countries with the higher estimated labor mobility costs. To do so it investigates correlates of the probability of an individual finding a job after a negative labor market shock, as well as of the duration of job search. The results show that higher housing prices are associated with higher mobility costs, suggesting that housing benefits or policies that increase the supply of housing may help reduce mobility costs in Indonesia. More generally, public expenditure on infrastructure seems to reduce labor mobility costs, particularly in urban areas, consistently with a reduction in transaction costs – such as urban transport. The results also highlight that formal institutional mechanisms such as job advertisements do not appear to work effectively to help labor mobility in Indonesia, suggesting the need to re-think active labor market policies. On the other hand, minimum wage level – a key outcome of labor market policy - does not appear to affect labor mobility. Labor mobility costs seem higher in urban areas, which could indicate a lower opportunity cost of joblessness than in rural area, employment composition skewed towards sectors with higher mobility costs and/or large congestion costs that negatively affect labor mobility. On the other hand, the general female penalty in labor mobility is less accentuated in urban areas, which may be the result of sectoral composition and/or less discriminatory cultural norms than in rural areas.
Publication(World Bank, Phnom Penh, 2019) Cunningham, Wendy ; Hollweg, Claire H.Jobs are an important part of Cambodia’s story of development success. There are eight million jobs in Cambodia, and eighty percent of Cambodian adults above the age of fifteen are working in contrast to 62.5 percent of adults in East Asia Pacific region. Cambodia will need to enact substantive reforms to secure more, better, and more inclusive jobs in the long term. Fundamentally, Cambodia needs to upgrade and integrate the two sides of its economy namely the exports sector, which includes foreign- owned (FDI) firms, and the domestic sector made up of household enterprises (HHEs) and small and medium enterprises (SMEs). Meanwhile, Cambodian workers need to increase their skills and ability to pursue the job opportunities that will materialize as these sectors increase their competitiveness.
Publication(World Bank, Washington, DC, 2016-02) Ruppert Bulmer, Elizabeth ; Hollweg, Claire H.As countries become increasingly integrated into the global economy, increased trade links with other countries translate into increased access to better or cheaper imports and increased demand for exports. Both can have an impact on consumers, producers and workers through household consumption, household production, and labor incentives. The channels through which increased trade integration can affect labor include: (i) the consumption channel, typically leading to an increase in purchasing power and therefore higher real wages, and (ii) the employment effect due to increased labor demand. The extent of these gains to trade will depend on the incidence of trade policies or trade shocks; in other words, the impact will depend on which products become less expensive, which sectors increase demand for skilled or unskilled labor, and which workers can access these new jobs. This report utilizes a range of methodologies and datasets that implicitly link trade and jobs; by using these complementary analytical approaches, we generate multiple perspectives on Lao PDR’s recent labor market outcomes, and their implications for Lao PDR’s current and future trade competitiveness.
Publication(World Bank, Washington, DC, 2017-04) Cali, Massimiliano ; Hollweg, Claire H.Like many emerging economies, South Africa has identified exports as an engine for more inclusive, job-intensive growth. However, employment growth did not follow the substantial export growth that South Africa experienced in the 2000s. This paper uses a newly developed World Bank database -- the Labor Content of Exports -- to show that the composition of South Africa's export growth helps to understand the weak relationship between export and employment growth. Minerals exports, which propelled export as well as wage growth, are not job intensive and as a result supported far less job growth. Minerals have also increasingly become an enclave sector with few backward linkages to the domestic economy. In contrast, manufacturing exports support jobs and wages primarily in input-providing sectors, where indirect manufacturing employment is nearly 4.5 times greater than direct manufacturing employment. The paper also documents a shift in the labor content of global value chain–intensive manufacturing sectors away from direct manufacturing to indirect services. Such a shift has been biased toward skilled labor. As a results of these trends, labor in services sectors has been the main beneficiary of South Africa's export growth, absorbing more than half of the growth in wage income from exports over the 2000s, primarily by supplying inputs to other sectors' exports.