Trade Liberalization, Unemployment, and Inequality with Endogenous Job Destruction

نویسنده

  • Priya Ranjan
چکیده

In a two sector extension of the Mortensen-Pissarides model of endogenous job destruction, it is shown that trade liberalization increases both job creation and job destruction in the import competing sector and reduces them in the export sector. Since trade liberalization increases unemployment in the import competing sector and reduces it in the export sector, the impact on economywide unemployment is ambiguous. While job destruction increases upon impact in the import competing sector, there is no immediate decrease in job destruction in the export sector leading to short term spikes in the net job destruction and unemployment rates in response to trade liberalization. Trade liberalization increases intersectoral wage inequality, however, intra-sectoral wage inequality increases in the export sector but decreases in the import competing sector. Finally, a more generous unemployment bene…t increases the responsiveness of job destruction to trade liberalization. Key words: trade liberalization, job destruction, unemployment, wage inequality JEL Classi…cation Codes: F16

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Openness of Trade, Unemployment and Inequality of Income Distribution: Comparison between Developed and Developing Countries

In the discussions of trading, unemployment and income distribution inequality, this question is raised by economists that in economic development of developing and developed countries, which policy is necessary in the first stage. Is trading liberalization the pre-requirement of transfer from a close economy to a relative open economy and is it necessary for the developed economy compared to o...

متن کامل

Trade Liberalization, Firm Heterogeneity, and Unemployment: An Empirical Investigation

This paper provides empirical evidence for the interaction between firm-level total factor productivity and trade liberalization as key determinants of firm-level job destruction caused by trade. We also test some key theoretical predictions from Melitz (2003), whose model is used to derive an explicit equation relating firm productivity and trade-induced labor layoff when a country liberalizes...

متن کامل

Wage inequality, technology, and trade

Recent widening of the wage gap between skilled and unskilled workers has been attributed mainly to skill-biased-technical-change and to trade liberalization. This paper examines the effects of the two in a unified model, in which trade and technology adoption are endogenous. The paper has two main results. First, technical progress increases the wage gap in developed and in less developed coun...

متن کامل

Kenya’s Trade Liberalization of the 1980s and 1990s: Policies, Impacts, and Implications1

As one of the first countries to sign a Structural Adjustment Loan with the World Bank, Kenya spent much of the 1980s and 1990s liberalizing its economy. This reform program included significant changes in trade policy, as the country’s post-colonial import substitution policies were replaced with an outward-looking, export promotion program. Though the country achieved targeted successes in th...

متن کامل

Within and Across Country Inequality in a Model of Trade and Endogenous Growth

This paper addresses the dynamics of income inequality, both within and across countries. In an endogenous growth model with North-South trade, the dynamics of income inequality depend on the ability of workers to adapt to new technologies, captured by the quality of education. For developing countries with low quality of education, Southern trade liberalization leads to: 1) an overall decline ...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:

دوره   شماره 

صفحات  -

تاریخ انتشار 2011