Trade Liberalization and Employment Effects in Ukraine

34 Pages Posted: 18 Nov 2005

See all articles by Atanas Christev

Atanas Christev

Heriot-Watt University; IZA Institute of Labor Economics

Olga Kupets

Kyiv School of Economics

Hartmut Lehmann

University of Bologna - School of Economics, Management, and Statistics; IZA Institute of Labor Economics

Date Written: October 2005

Abstract

This paper addresses the important issue of the effects of trade liberalization on labor market job flows. It studies the case of Ukraine where we view the sudden openness of the economy to trade as a quasi-natural experiment. We use disaggregated data on manufacturing industries and customs data on trade flows taking account of shifting trade patterns after the disintegration of CMEA trade regime. We provide some first evidence that three-digit NACE sector job flows are predominantly driven by idiosyncratic factors within industries. Other things equal, there is increased labor shedding as larger non-state share in industry relates to less job creation and more job destruction. Trade openness does affect job flows in Ukrainian manufacturing disproportionately according to trade orientation. We find that while trade with CIS decreases job destruction, trade with the EU increases excess reallocation mainly through job creation.

Keywords: job creation, job destruction, trade flows and trade liberalization, Ukraine

JEL Classification: E24, F14, J63, P23

Suggested Citation

Christev, Atanas and Kupets, Olga and Lehmann, Hartmut F., Trade Liberalization and Employment Effects in Ukraine (October 2005). IZA Discussion Paper No. 1826. Available at SSRN: https://ssrn.com/abstract=851186

Atanas Christev (Contact Author)

Heriot-Watt University ( email )

Riccarton
Edinburgh EH14 4AS, Scotland EH14 1AS
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Olga Kupets

Kyiv School of Economics ( email )

vul. Yakira, 13, 3d floor, suite 334
Kyiv, 04119
Ukraine

Hartmut F. Lehmann

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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