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The impact of trade on employment in Colombian

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  • Yezid HERNÁNDEZ LUNA

Abstract

This article analyses the impact of imports and exports, from and towards the most important Colombiantrade partners (United States, European Union, China, Andean Community of Nations, Venezuela, Brazil andMexico), on employment in the manufacturing sector during 2000 ‐ 2007. We use the System GMMmethodology to estimate an equation of labor demand as a function of capital, wage, and a measure ofimports and exports. Additionally, we estimate the effects of the share of trade with each trade partner overthe labor demand, and compute interaction variables to analyze changes in the effects of international tradeacross the categories of workers (high and low skilled).Econometric estimations produced, for this period, evidence on inertia in the Colombian labor market. Inaddition, a substitution relationship between capital and labor was also found. Imports showed no or anegative effect over employment depending on the index of imports used. Analyses by destiny and origin oftrade showed that exports to Venezuela and Andean Community of Nations had a negative correlation toemployment. Likewise, we found that only commerce with China had some impact on each manufacturingsubsector employment, depending on the characteristics of the workers (high or low skilled).

Suggested Citation

  • Yezid HERNÁNDEZ LUNA, 2011. "The impact of trade on employment in Colombian," Archivos de Economía 9227, Departamento Nacional de Planeación.
    • Handle: RePEc:col:000118:009227
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    References listed on IDEAS

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    More about this item

    Keywords

    International trade; manufacturing sector employment; skilled and unskilled labor; globalization; developing countries; System GMM estimation; panel data.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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