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Trade Liberalization and Working Conditions

Author

Listed:
  • Bastien Alvarez
  • Gianluca Orefice
  • Farid Toubal

Abstract

This paper examines how trade liberalization-induced labor demand shocks affect wages and non-wage working conditions. Using exogenous trade shocks from EU enlargement and worker-level data, we find that export liberalization increases temporary contracts and atypical work schedules, particularly for production workers. However, it has no significant effect on wages, which may reflect firms’ ability to expand employment without raising pay due to labor supply elasticity and unemployment. Import liberalization weakly affects working conditions but, consistent with previous studies, lowers wages as firms face stronger competition and reduced labor demand.

Suggested Citation

  • Bastien Alvarez & Gianluca Orefice & Farid Toubal, 2025. "Trade Liberalization and Working Conditions," CESifo Working Paper Series 11675, CESifo.
    • Handle: RePEc:ces:ceswps:_11675
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp11675.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    temporary contracts; working conditions; wages; employment; Eastern European enlargement; trade liberalization;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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