Local Labor Markets Dynamics and Export Shocks: Theory and Evidence from Indonesia

Carlos Góes, Juan Segnana, Raymond Robertson and Gladys Lopez-Acevedo ()
Additional contact information
Juan Segnana: Tilburg University
Gladys Lopez-Acevedo: World Bank
Authors registered in the RePEc Author Service: Gladys Cristina Lopez Acevedo

No 16473, IZA Discussion Papers from IZA Network @ LISER

Abstract: We study the dynamic effects of export exposure over local labor markets in Indonesia. We develop an empirical strategy to instrument exposure to exports using exposure to foreign demand shocks and validate it showing that the labor market responses are consistent with those expected from demand shocks in a spatial model. Export shocks unambiguously increase employment in Indonesia. While effects on average income per employee are ambiguous due to industry- and sectoral-compositional effects, our estimates of district-level welfare suggest that export shocks induce an increase in welfare.

Keywords: international trade; labor markets; inequality; poverty; jobs (search for similar items in EconPapers)
JEL-codes: F16 J16 O19 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2023-09
New Economics Papers: this item is included in nep-int, nep-lab, nep-sea and nep-ure
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Related works:
Working Paper: Local Labor Market Dynamics and Export Shocks: Theory and Evidence from Indonesia (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16473

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