Trade, Jobs, and Worker Welfare

This paper examines the welfare effects of international trade on workers in a new dynamic general equilibrium discrete choice model labor mobility, where workers’ set jobs is endogenous. The analysis exploits differential exposure sectors and regions to destination-specific demand shocks estimate impacts exports wages, employment, using employer-employee panel data for Brazil. It then employs same empirical strategy structural parameters different components changes model-implied worker welfare. Counterfactual simulations show that endogenous number job options significantly magnifies shocks.