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Trade liberalization and its effects on labor fluidity: Evidence from Colombia

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  • Juan Felipe Mejía
  • Leonardo-Fabio Morales
  • Daniel S. Medina

Abstract

This article investigates the effects of trade liberalization on labor fluidity. We use a panel of Colombian firms for the period of 2008 to 2015. There is evidence that the effects of the degree of protection from international trade are dynamically heterogeneous. Before the reduction in tariffs, the relationship between tariffs and all measures of labor fluidity is negative. Once the reduction in tariffs is fully implemented, firms in more protected industries create more jobs than are destroyed, and in this way, these firms contribute to increasing labor market fluidity.

Suggested Citation

  • Juan Felipe Mejía & Leonardo-Fabio Morales & Daniel S. Medina, 2018. "Trade liberalization and its effects on labor fluidity: Evidence from Colombia," The International Trade Journal, Taylor & Francis Journals, vol. 32(1), pages 43-75, January.
    • Handle: RePEc:taf:uitjxx:v:32:y:2018:i:1:p:43-75
    DOI: 10.1080/08853908.2017.1389324
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    References listed on IDEAS

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    1. A. Kerem Co?ar & Nezih Guner & James Tybout, 2016. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy," American Economic Review, American Economic Association, vol. 106(3), pages 625-663, March.
    2. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 105-130, Summer.
    3. Naércio Aquino Menezes Filho & Marc-Andreas Muendler, 2007. "Labor Reallocation in Response to Trade Reform," CESifo Working Paper Series 1936, CESifo.
    4. Juan Felipe Mejía, 2011. "Export Diversification and Economic Growth," Contributions to Economics, Springer, number 978-3-7908-2742-2, June.
    5. Steven J. Davis & John Haltiwanger, 2014. "Labor Market Fluidity and Economic Performance," NBER Working Papers 20479, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Leonardo Fabio Morales & José Lobo, 2017. "Estimating Vacancies from Firms’ Hiring behavior: The Case of a Developing Economy," Borradores de Economia 1017, Banco de la Republica de Colombia.
    2. repec:ags:aaea22:335460 is not listed on IDEAS
    3. Leonardo Fabio Morales & Christian Posso & Luz A. Flórez, 2021. "Heterogeneity in the Returns to Tertiary Education for the Disadvantage Youth: Quality vs. Quantity Analysis," Borradores de Economia 1150, Banco de la Republica de Colombia.

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