scholarly journals Patterns of Labor Market Adjustment to Trade Shocks with Imperfect Capital Mobility

2021 ◽  
Author(s):  
Erhan Artuc ◽  
Irene Brambilla ◽  
Guido Porto
Keyword(s):  
Labor Market ◽  
Capital Mobility ◽  
Trade Shocks ◽  
Labor Market Adjustment

Trade Shocks and Labor Market Adjustment

2021 ◽  
Vol 3 (1) ◽  
pp. 115-130
Author(s):  
Ryan Kim ◽  
Jonathan Vogel
Keyword(s):  
Labor Market ◽  
Relative Increase ◽  
Relative Price ◽  
Trade Shocks ◽  
Market Impacts ◽  
The Impact ◽  
Wage Income ◽  
Empirical Investigations ◽  
Labor Market Adjustment

We develop a framework to analyze the impact of trade shocks on a range of labor market adjustment margins in economies with a large number of sectors and labor groups. We provide analytic results characterizing equilibria. We show that labor groups earning a greater share of wage income in sectors with relative price declines experience a relative increase in unemployment and nonparticipation and decrease in wages and welfare. Our framework provides a guide for quantitative and empirical investigations into the labor market impacts of trade shocks. (JEL F16, J22, J31, J64)

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