Description: Labor Demand and Trade Reform in Latin America

Labor Demand and Trade Reform in Latin America

There are concerns that trade reform and globalization will increase the uncertainty that the average worker, especially the relatively unskilled worker, faces. The increased competitiveness of product markets and greater access to foreign inputs,...

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Bibliographic Details
Main Authors:	Fajnzylber, Pablo, Maloney, William F.
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE VALUE ADJUSTMENT PERIOD ADJUSTMENT PROCESS AVERAGE TARIFFS BALANCE OF PAYMENTS CAPITAL GOODS CAPITAL INPUTS CARTEL CHANGES IN TRADE COLLUSION COMPETITIVE MARKET COMPETITIVENESS CONSTANT RETURNS CONSTANT RETURNS TO SCALE COST FUNCTIONS CURRENCY DATA SET DATA SETS DEMAND CURVE DEMAND CURVES DEMAND ELASTICITIES DEMAND ELASTICITY DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DOMESTIC INDUSTRY DOMESTIC MARKET DUMPING DUOPOLY DYNAMIC PANEL ECONOMETRICS ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIES OF SCALE ELASTICITIES ELASTICITY ELASTICITY OF DEMAND ELASTICITY OF SUBSTITUTION EMPIRICAL EVIDENCE EMPIRICAL LITERATURE EMPIRICAL STUDIES EMPLOYMENT ENDOGENOUS VARIABLES EQUILIBRIUM EXCHANGE RATE EXCHANGE RATE MOVEMENTS EXPENDITURES EXPLANATORY VARIABLES EXPORT INDUSTRIES EXPORTS FACTOR DEMAND FACTOR PRICES FOREIGN INVESTMENT FUNCTIONAL FORM GDP HETEROSKEDASTICITY HUMAN CAPITAL IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPERFECT COMPETITION IMPORT PENETRATION IMPORT TARIFFS IMPORTS INCOMES INCREASING RETURNS INCREASING RETURNS TO SCALE INDUSTRIAL SECTOR INTERMEDIATE INPUTS INTERNATIONAL TRADE LABOR COSTS LABOR DEMAND LABOR DEMAND FUNCTIONS LABOR MARKET LABOR MARKET VOLATILITY LABOR MARKETS LAGGED DEPENDENT LDCS LIBERALIZATION OF TRADE MARGINAL COST MARGINAL COSTS MARGINAL REVENUE MARKET BEHAVIOR MARKET POWER MARKET RISK MARKET STRUCTURE MONOPOLY RENTS NEGATIVE CORRELATION NEGATIVE IMPACT OLIGOPOLY OPEN TRADE REGIME OUTPUT ELASTICITY POLICY CHANGE POLICY RESEARCH POLICY VARIABLES POLITICAL ECONOMY POVERTY REDUCTION PROCESS OF LIBERALIZATION PRODUCERS PRODUCT MARKETS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFIT MARGINS PROPORTIONAL CHANGE PROTECTIONISM QUOTAS RANDOM EFFECTS RANDOM WALK REAL EXCHANGE RATE REAL EXCHANGE RATES RELATIVE PRICES RELATIVE WAGES RETURNS TO SCALE REVENUE CURVE SCALE EFFECT SERIAL CORRELATION SPECIALIZATION STOCKS SUBSTITUTION ELASTICITIES SUPPLY CURVE SUPPLY CURVES TARIFF BARRIERS TARIFF PROTECTION TARIFF RATE TARIFF REDUCTIONS TECHNOLOGICAL CHANGE TOTAL COSTS TRADE BARRIERS TRADE DATA TRADE DEFICIT TRADE FLOWS TRADE INTEGRATION TRADE LIBERALIZATION TRADE OPENNESS TRADE POLICY TRADE REFORM TRADE REFORMS TRADE REGIMES TURNOVER UNEMPLOYMENT UNSKILLED LABOR UNSKILLED WORKERS VALUE ADDED VOLUNTARY EXPORT RESTRAINTS WAGE CHANGES WAGE INEQUALITY
Online Access:	http://documents.worldbank.org/curated/en/2000/11/729383/labor-demand-trade-reform-latin-america http://hdl.handle.net/10986/19777

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Summary:	There are concerns that trade reform and globalization will increase the uncertainty that the average worker, especially the relatively unskilled worker, faces. The increased competitiveness of product markets and greater access to foreign inputs, the argument goes, will lead to more elastic demand for workers. This may have adverse consequences for both labor market volatility and wage dispersion. The authors argue that while the case that trade liberalization should increase own-wage elasticities may be broadly compelling for competitive import-competing industries, it is less so for imperfectly competitive, nontradable, or export industries. They test the hypothesis using establishment-level panel data from three countries with periods of liberalization. The data provide only mixed support for the idea that trade liberalization has an impact on own-wage elasticities. No consistent patterns emerge. If globalization is making the lives of workers more insecure, it is probably working through some other mechanism.

Labor Demand and Trade Reform in Latin America

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