Labor Reallocation in Response to Trade Reform

Naercio Menezes-Filho and Marc-Andreas Muendler

No 17372, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Tracking individual workers across jobs after Brazil's trade liberalization in the 1990s shows that tariff cuts trigger worker displacements, but neither exporters nor comparative-advantage sectors absorb trade-displaced labor. On the contrary, exporters separate from significantly more and hire fewer workers than the average employer. Trade liberalization increases transitions to services, unemployment, and out of the labor force. Results are consistent with faster labor productivity growth than sales expansions so that output shifts to more productive firms while labor does not. Higher rates of failed reallocations and longer durations of complete reallocations result, associated with a costly incidence of idle resources.

JEL-codes: F14 F16 J23 J63 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-lab
Note: LS
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Citations: View citations in EconPapers (170)

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Related works:
Working Paper: Labor Reallocation in Response to Trade Reform (2007)
Working Paper: Labor Reallocation in Response to Trade Reform (2007)
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