IDEAS home Printed from https://ideas.repec.org/p/ulb/ulbeco/2013-9223.html
   My bibliography  Save this paper

Labor markets and kaleidoscopic comparative advantage

Author

Listed:
  • Daniel Traca

Abstract

Capturing the notion of kaleidoscopic comparative advantage (Bhagwati, 1998), we show that international trade increases the volatility of profitability. In this framework, we address the labor market implications of an increase in openness, when insurance and credit markets are imperfect. With kaleidoscopic comparative advantage, trade raises the likelihood of firm shutdown and worker displacement, which, in equilibrium, affects wage contracts. In a simple model, we analyze the consequences for wage levels, earnings volatility, job instability, and income distribution, of the openness of previously nontraded industries to international trade.

Suggested Citation

  • Daniel Traca, 2005. "Labor markets and kaleidoscopic comparative advantage," ULB Institutional Repository 2013/9223, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/9223
    Note: FLWIN
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marianne Bertrand, 2004. "From the Invisible Handshake to the Invisible Hand? How Import Competition Changes the Employment Relationship," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 723-766, October.
    2. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    3. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Working Papers 761, Princeton University, Department of Economics, Industrial Relations Section..
    4. Daniel A. Traca, 2005. "Trade Exposure, Export Intensity, and Wage Volatility: Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 336-347, May.
    5. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 55-142.
    6. Henry S. Farber, 1997. "The Changing Face of Job Loss in the United States, 1981-1995," Working Papers 761, Princeton University, Department of Economics, Industrial Relations Section..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Don J. Webber & Michael Horswell, 2009. "Winners and Losers: Spatial variations in labour productivity in England and Wales," Working Papers 0912, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:pri:cepsud:171farber is not listed on IDEAS
    2. Henry S. Farber, 2008. "Job Loss and the Decline in Job Security in the United States," Working Papers 1055, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Mandal, Bidisha & Ayyagari, Padmaja & Gallo, William T., 2011. "Job loss and depression: The role of subjective expectations," Social Science & Medicine, Elsevier, vol. 72(4), pages 576-583, February.
    4. Henry S. Farber, 2008. "Job Loss and the Decline in Job Security in the United States," Working Papers 1055, Princeton University, Department of Economics, Center for Economic Policy Studies..
    5. Farber, Henry S, 2015. "Job Loss in the Great Recession and its Aftermath: U.S. Evidence from the Displaced Workers Survey," IZA Discussion Papers 9069, Institute of Labor Economics (IZA).
    6. Jackson, Paul & Ortego-Marti, Victor, 2024. "Skill loss during unemployment and the scarring effects of the COVID-19 pandemic," Labour Economics, Elsevier, vol. 88(C).
    7. Henry S. Farber, 2007. "Job Loss and the Decline in Job Security in the United States," Working Papers 1041, Princeton University, Department of Economics, Industrial Relations Section..
    8. Henry S. Farber, 2016. "Employment, Hours and Earnings Consequences of Job Loss: U.S. Evidence from the Displaced Workers Survey," Working Papers 589a, Princeton University, Department of Economics, Industrial Relations Section..
    9. Mertens, Antje, 1999. "Job stability trends and labor market (re-)entry in West Germany 1984 - 1997," SFB 373 Discussion Papers 1999,60, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    10. Daniel A. Traca, 2005. "Globalization, Wage Volatility, and the Welfare of Workers," Review of International Economics, Wiley Blackwell, vol. 13(2), pages 237-249, May.
    11. Krebs, Tom & Scheffel, Martin, 2019. "Optimal Social Insurance and Rising Labor Market Risk," IZA Discussion Papers 12128, Institute of Labor Economics (IZA).
    12. Henry S. Farber, 2007. "Job Loss and the Decline in Job Security in the United States," Working Papers 1041, Princeton University, Department of Economics, Industrial Relations Section..
    13. Bruno Contini, 2000. "Job Changes and Wage Dynamics," LABORatorio R. Revelli Working Papers Series 5, LABORatorio R. Revelli, Centre for Employment Studies.
    14. Jacobson, Louis & LaLonde, Robert & G. Sullivan, Daniel, 2005. "Estimating the returns to community college schooling for displaced workers," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 271-304.
    15. Heisig, Jan Paul & Gesthuizen, Maurice & Solga, Heike, 2019. "Lack of skills or formal qualifications? New evidence on cross-country differences in the labor market disadvantage of less-educated adults," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 83, pages 1-20.
    16. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historial Perspective from the Displaced Workers Survey, 1984-2010," Working Papers 1309, Princeton University, Department of Economics, Industrial Relations Section..
    17. Henry S. Farber, 2011. "Job Loss in the Great Recession: Historical Perspective from the Displaced Workers Survey, 1984-2010," NBER Working Papers 17040, National Bureau of Economic Research, Inc.
    18. Noel GASTON & YOSHIMI Taiyo, 2020. "Heterogenous Job Separations and the Balassa-Samuelson Effect," Discussion papers 20032, Research Institute of Economy, Trade and Industry (RIETI).
    19. den Haan, Wouter J. & Ramey, Garey & Watson, Joel, 2000. "Job destruction and the experiences of displaced workers," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 87-128, June.
    20. Bergemann, Annette & Mertens, Antje, 2000. "Job stability trends, layoffs and quits: An empirical analysis for West Germany," SFB 373 Discussion Papers 2001,102, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    21. Karen Needels & Walter Corson & Walter Nicholson, "undated". "Left Out of the Boom Economy: UI Recipients in the Late 1990s," Mathematica Policy Research Reports 09dfd8b030124a2799bf225dc, Mathematica Policy Research.

    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ulb:ulbeco:2013/9223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Benoit Pauwels (email available below). General contact details of provider: https://edirc.repec.org/data/ecsulbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.