Agro‐Manufactured Export Prices, Wages and Unemployment
17 Pages Posted: 28 Apr 2020
Date Written: August 2008
This article estimates the impacts of world agricultural trade liberalization on wages and unemployment in Argentina in the presence of individual labor supply responses and adjustment costs in labor demand. After a 10% increase in agro‐manufactured export prices, I find that: (a) the employment probability would increase by 1.36 percentage points, matched by a decline in the unemployment probability of 0.75 percentage points and an increase in labor market participation of 0.61 percentage points; (b) the unemployment rate would decline by 1.23 percentage points; (c) expected wages would increase by 10.3%, mostly due to higher employment probabilities.
Keywords: agricultural trade reforms, labor market adjustments to trade, poverty and inequality
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