Sticky Feet : How Labor Market Frictions Shape the Impact of International Trade on Jobs and Wages

Hollweg, Claire H. ; Lederman, Daniel ; Rojas, Diego ; Ruppert Bulmer, Elizabeth

Washington, DC:World Bank

关键词: ACTIVE LABOR;    ACTIVE LABOR MARKET;    ACTIVE LABOR MARKET POLICY;    ADJUSTMENT ASSISTANCE;    ADJUSTMENT COST;   

DOI  :  10.1596/978-1-4648-0263-8
RP-ID  :  88890

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This report analyzes the paths by whichdeveloping country labor markets adjust to permanenttrade-related shocks. Trade shocks can bring aboutreallocation of labor between industries, but the presenceof labor mobility costs implies economy-wide losses becausethey extend the period of economic adjustment. This reportfocuses primarily on the adjustment costs faced by workersafter a trade shock, because of magnitude and welfareimplications and policy relevance. From a policy viewpoint,understanding the relative magnitudes of labor mobility andadjustment costs can help policymakers design trade policiesthat are consistent with employment objectives, can becomplemented by labor policies, or support programs tofacilitate labor transitions, or both. To complement andvalidate the analysis based on structural choice models, thestudy designed a distinct empirical approach usingreduced-form econometric estimation strategies. Thisapproach examines the impact of structural reforms andworker displacement on labor market outcomes. This makes itpossible to estimate the time required to adjust to atrade-related shock, but does not assume the rigidunderlying relationship inherent in structural models. Thisreport is organized as follows: chapter one givesintroduction. Chapter two presents evidence from theliterature on the relative magnitude of labor adjustmentcosts borne by workers and by firms. Chapter three presentsa new database of country-level labor mobility costestimates for both developing and developed economies.Chapter four showcases country case studies in which labormobility costs vary by industry, firm size, and worker type(for example, informal versus. formal). Chapter fiveanalyzes the impact of structural reforms on aggregate labormarket outcomes across countries and the effect of workerdisplacement due to plant closings on the employmentoutcomes of individual workers in Mexico. Chapter sixconcludes with a summary of the main findings about thelabor adjustment costs associated with trade-related shocksand a discussion of policy responses internationally.