Trade Shocks and Labor Market Adjustment
- (pp. 115-30)
AbstractWe 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.
CitationKim, Ryan, and Jonathan Vogel. 2021. "Trade Shocks and Labor Market Adjustment." American Economic Review: Insights, 3 (1): 115-30. DOI: 10.1257/aeri.20200101
- F16 Trade and Labor Market Interactions
- J22 Time Allocation and Labor Supply
- J31 Wage Level and Structure; Wage Differentials
- J64 Unemployment: Models, Duration, Incidence, and Job Search