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Trade, Jobs, and Worker Welfare

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  • Bastos, Paulo
  • Artuc, Erhan
  • Lee, Eunhee

Abstract

We study the welfare effects of international trade on workers in a new dynamic general equilibrium discrete choice model of labor mobility, where the workers' choice set of jobs is endogenous. We exploit differential exposure of sectors and regions to destination-specific demand shocks to estimate the impacts of exports on wages, employment, and labor mobility, using employer-employee panel data for Brazil. We employ the same empirical strategy to estimate structural parameters and the different components of changes in model-implied worker welfare. Counterfactual simulations show that the endogenous number of job options significantly magnifies the welfare effects of trade shocks.

Suggested Citation

  • Bastos, Paulo & Artuc, Erhan & Lee, Eunhee, 2021. "Trade, Jobs, and Worker Welfare," CEPR Discussion Papers 16009, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16009
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    Keywords

    Trade shocks; Jobs; Labor mobility; Adjustment costs; Worker welfare;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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