American Economic Review: Vol. 102 No. 3 (May 2012)


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Liberalized Trade and Worker-Firm Matching

Article Citation

Davidson, Carl, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm, and Susan Chun Zhu. 2012. "Liberalized Trade and Worker-Firm Matching." American Economic Review, 102(3): 429-34.

DOI: 10.1257/aer.102.3.429


Recent theoretical analysis suggests that a reduction in the cost of exporting increases the degree of assortative matching between workers and firms in export-oriented industries. Changes that reduce the cost of imports have an ambiguous impact on matching. We combine detailed Swedish matched worker-firm data from 1995-2005 with tariff data to test these hypotheses. The data cover 94 sectors subject to international competition and include all firms with at least 20 employees. Our findings strongly support the theoretical predictions.

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Davidson, Carl (MI State U)
Heyman, Fredrik (IFN, Stockholm)
Matusz, Steven (MI State U)
Sjöholm, Fredrik (Lund U and IFN, Stockholm)
Zhu, Susan Chun (MI State U)

JEL Classifications

F16: Trade and Labor Market Interactions
J41: Labor Contracts

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