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Globalization and Imperfect Labor Market Sorting

Author

Listed:
  • Davidson, Carl

    (Michigan State University)

  • Heyman, Fredrik

    (The Research Institute of Industrial Economics)

  • Matusz, Steven

    (Michigan State University)

  • Sjöholm, Fredrik

    (Department of Economics, Lund University)

  • Zhu, Susan Chun

    (Michigan State University)

Abstract

This paper focuses on the ability of the labor market to correctly match heterogeneous workers to jobs within a given industry and the role that globalization plays in that process. Using matched worker-firm data from Sweden, we find strong evidence that openness improves the matching between workers and firms in industries with greater comparative advantage. This suggests that there may be significant gains from globalization that have not been identified in the past – globalization may improve the efficiency of the matching process in the labor market. These results remain unchanged after adding controls for technical change at the industry level or measures of domestic anti-competitive regulations and product market competition. Our results are also robust to alternative measures of the degree of matching, openness, or the trade status of an industry

Suggested Citation

  • Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Zhu, Susan Chun, 2011. "Globalization and Imperfect Labor Market Sorting," Working Papers 2011:25, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2011_025
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    More about this item

    Keywords

    Matching; Globalization; Firms; Workers; Multinational Enterprises; International Trade;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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