Job Creation, Job Destruction, and International Competition: A Literature Review

Posted: 3 Jan 2004

See all articles by Michael W. Klein

Michael W. Klein

Tufts University - The Fletcher School of Law and Diplomacy; National Bureau of Economic Research (NBER)

Scott D. Schuh

Federal Reserve Bank of Boston - Research Department

Robert K. Triest

Federal Reserve Bank of Boston - Research Department; Boston College

Date Written: December 2002

Abstract

This paper is a chapter in our forthcoming monograph, Job Creation, Job Destruction, and International Competition (W.E. Upjohn Institute, 2003), and expands on the ideas advanced in Klein, Schuh, and Triest (2003). The chapter provides an extensive review of the literature that studies the connection between international factors, such as real exchange rates and trade agreements, and the domestic labor market. Until recently, the literature has focused on the effects of international factors on net employment at aggregate levels or in selected import-competing industries. In the long run, aggregate net employment largely is unaffected by international factors, whereas these factors have important allocative effects in the short and long run, both between and within detailed industries. Thus, it is appropriate to study the components of net employment - gross job creation and destruction - when measuring the impact of international factors on labor markets. Examining gross job and worker turnover associated with changes in international factors raises questions about the accuracy of prior estimates of adjustment costs associated with international factors because gross flows are an order of magnitude larger than net employment flows.

Keywords: Gross Job Flows, Real Exchange Rates, Openness, Adjustment Costs, Unemployment

JEL Classification: F4, J6

Suggested Citation

Klein, Michael W. and Schuh, Scott and Triest, Robert, Job Creation, Job Destruction, and International Competition: A Literature Review (December 2002). Available at SSRN: https://ssrn.com/abstract=458441

Michael W. Klein (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States
617-627-2718 (Phone)
617-627-3712 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Scott Schuh

Federal Reserve Bank of Boston - Research Department ( email )

600 Atlantic Ave.
Boston, MA 02210
United States
617-973-3941 (Phone)
617-619-7541 (Fax)

Robert Triest

Federal Reserve Bank of Boston - Research Department ( email )

600 Atlantic Avenue
Boston, MA 02210
United States
617-973-3431 (Phone)
617-973-3957 (Fax)

Boston College ( email )

Chestnut Hill, MA 02167
United States

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