Trade Liberalization and Intersectoral Labor Movements

Stanford GSB Working Paper No. 1652

59 Pages Posted: 24 Oct 2001

See all articles by Jessica Seddon

Jessica Seddon

Graduate School of International Relations and Pacific Studies (IRPS), Economics

Romain T. Wacziarg

UCLA Anderson School of Management; National Bureau of Economic Research (NBER)

Date Written: October 2001

Abstract

This paper examines the impact of trade liberalization episodes on movements of labor across sectors. The aim is to assess empirically whether increased trade openness leads to increased structural change, and if so to what extent. Results for a set of 25 liberalization episodes suggest weakly negative effects of liberalization on the extent of intersectoral labor shifts at the economy-wide 1-digit level of disaggregation. We do uncover increased sectoral change after liberalization at the 3-digit level within manufacturing, although the estimated effects are statistically weak and small in magnitude. The effects of liberalization on labor shifts differ across individual countries, in a way related to the scope and depth of reforms as well as the extent of job protection regulations.

Keywords: Trade liberalization, job reallocation

JEL Classification: F10, J21, O57

Suggested Citation

Seddon Wallack, Jessica and Wacziarg, Romain T., Trade Liberalization and Intersectoral Labor Movements (October 2001). Stanford GSB Working Paper No. 1652. Available at SSRN: https://ssrn.com/abstract=287888 or http://dx.doi.org/10.2139/ssrn.287888

Jessica Seddon Wallack

Graduate School of International Relations and Pacific Studies (IRPS), Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States
(858) 822 5733 (Phone)
(858) 534 3939 (Fax)

Romain T. Wacziarg (Contact Author)

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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