Publication: Trade Shocks and Labor Adjustment: A Structural Empirical Approach
No Thumbnail Available
Date
2010
ISSN
00028282
Published
2010
Author(s)
Editor(s)
Abstract
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.
Link to Data Set
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations
Collections
Related items
Showing items related by metadata.
Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/d8cb1c4a-91cd-5fc5-a7e5-6aa35eb47d4a_metadata/itemlist'.
Users also downloaded
Showing related downloaded files
Error: Could not load results for 'https://openknowledge.worldbank.org/server/api/item/relateditemlistconfigs/d8cb1c4a-91cd-5fc5-a7e5-6aa35eb47d4a_downloads/itemlist'.