Agro-Manufactured Export Prices, Wages and Unemployment
This paper estimates the impacts of world agricultural trade liberalization on wages, employment and unemployment in Argentina, a country with positive net agricultural exports and high unemployment rates. In the estimation of these wage and unempl...
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| Language: | English |
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Washington, DC: World Bank
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/01/8965647/agro-manufactured-export-prices-wages-unemployment http://hdl.handle.net/10986/6471 |
| Summary: | This paper estimates the impacts of
world agricultural trade liberalization on wages, employment
and unemployment in Argentina, a country with positive net
agricultural exports and high unemployment rates. In the
estimation of these wage and unemployment responses, the
empirical model allows for individual labor supply responses
and for adjustment costs in labor demand. The findings show
that a 10 percent increase in the price of agricultural
exports would cause an increase in the Argentine employment
probability of 1.36 percentage points, matched by a decline
in the unemployment probability of 0.75 percentage points
and an increase in labor market participation of 0.61
percentage points. Further, the unemployment rate would
decline by 1.23 percentage points (by almost 10 percent).
Expected wages would increase by 10.3 percent, an effect
that is mostly driven by higher employment probabilities.
This indicates that the bulk of the impacts of trade reforms
originates in household responses in the presence of
adjustment costs, and that failure to account for them may
lead to significant biases in the welfare evaluation of
trade policy. |
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