Trade and Turnover: Theory and Evidence

Carl Davidson () and Steven J. Matusz ()

International Trade from EconWPA

Abstract: Is the pattern of trade correlated with cross-sector differences in job turnover? Theoretically, external shocks feed through to changes in domestic employment and cross-sector differences in turnover give rise to compensating wage differentials, which feed through to output prices. Using two different data sets on turnover, we find strong evidence that normalized US net exports by sector are negatively correlated with job destruction and worker separation rates. Weaker evidence suggests a positive correlation with between normalized net exports and job acquisition. Using sector-specific job destruction data for both Canada and the US, we find confirmation of the theoretical prediction that normalized net exports to Canada are negatively related to the ratio of the US job destruction rate to the Canadian job destruction rate.

Keywords: Job Creation; Job Destruction; Trade; Labor (search for similar items in EconPapers)
JEL-codes: F16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2005-03-15
Note: Type of Document - pdf; pages: 43. 43 pages, PDF file
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Journal Article: Trade and Turnover: Theory and Evidence (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0503009

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