Globalization and Imperfect Labor Market Sorting

45 Pages Posted: 14 Jan 2011

See all articles by Carl Davidson

Carl Davidson

Michigan State University - Department of Economics

Fredrik Heyman

Research Institute of Industrial Economics (IFN)

Steven J. Matusz

Michigan State University - Department of Economics

Fredrik Sjöholm

Lund University School of Economics and Management; Research Institute of Industrial Economics (IFN)

Susan Chun Zhu

Michigan State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 30, 2010

Abstract

This paper focuses on the ability of the labor market to correctly match heterogeneous workers to jobs within a given industry and the role that globalization plays in that process. Using matched worker-firm data from Sweden, we find strong evidence that openness improves the matching between workers and firms in export-oriented industries. This suggests that there may be significant gains from globalization that have not been identified in the past – globalization may improve the efficiency of the matching process in the labor market. On the other hand, we find no evidence that openness affects the degree of matching in import-competing industries. These results remain unchanged after adding controls for technical change at the industry level or measures of domestic anti-competitive regulations and product market competition. In addition, we find no evidence that technical change has any impact on the degree of matching at the industry level. Our results are also robust to alternative measures of the degree of matching, openness, or the trade status of an industry.

Suggested Citation

Davidson, Carl and Heyman, Fredrik and Matusz, Steven J. and Sjöholm, Fredrik and Chun Zhu, Susan, Globalization and Imperfect Labor Market Sorting (December 30, 2010). IFN Working Paper No. 856. Available at SSRN: https://ssrn.com/abstract=1740368 or http://dx.doi.org/10.2139/ssrn.1740368

Carl Davidson

Michigan State University - Department of Economics ( email )

25 C Marshall-Adams Hall
East Lansing, MI 48824
United States
517-355-7756 (Phone)
517-432-1068 (Fax)

HOME PAGE: http://www.msu.edu/~ec/faculty/davidson/davidson.html

Fredrik Heyman (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se

Steven J. Matusz

Michigan State University - Department of Economics ( email )

Department of Economics
486 West Circle Drive
East Lansing, MI 48824
United States
517-353-8719 (Phone)
517-432-1068 (Fax)

HOME PAGE: http://econ.msu.edu/faculty/matusz/index.php

Fredrik Sjöholm

Lund University School of Economics and Management ( email )

P.O Box 7080
Lund
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Susan Chun Zhu

Michigan State University - Department of Economics ( email )

214 Marshall Hall
East Lansing, MI 48824
United States
517-355-9647 (Phone)
517-432-1068 (Fax)

HOME PAGE: http://www.msu.edu/~ec/faculty/zhu/zhu.html

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