Trade Liberalisation and Employment Effects in Ukraine
Heriot-Watt University; Institute for the Study of Labor (IZA)
National University of Kyiv-Mohyla Academy (NaUKMA); Institute for the Study of Labor (IZA)
University of Bologna - Faculty of Economics; Institute for the Study of Labor (IZA)
Comparative Economic Studies, Vol. 50, Issue 2, pp. 318-340, 2008
This paper addresses the effects of trade liberalisation on job flows. It studies the case of Ukraine where the sudden opening up of the economy to trade can be viewed as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows to account for shifting trade patterns after the disintegration of the Soviet Union and the Council of Mutual Economic Assistance (CMEA) trade regime. We provide, for the first time, evidence on job flows at the three-digit sector level in Ukrainian manufacturing and show that these flows are predominantly driven by idiosyncratic factors within industries. However, we also establish that trade openness does affect job flows differently across different trading areas. We find that while trade with Commonwealth of Independent States decreases job destruction, trade with the European Union increases excess reallocation mainly through job creation.
Number of Pages in PDF File: 23Accepted Paper Series
Date posted: September 28, 2010
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