Informal Jobs and Trade Liberalisation in Argentina

Pablo Acosta and Gabriel Montes-Rojas ()

No 2013-3, Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) from Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET)

Abstract: Rapid trade liberalisation can exert profound effects on labour markets. Domestic firms, to sustain competitiveness for survival, could react through cutting labour benefits to achieve cost reductions. Alternatively, trade liberalisation may alter the industry composition of firms changing the aggregate formality rates. This paper studies the relationship between trade liberalisation and informality in Argentina. Using manufacturing industry-level data for 1992-2003, the results confirm the hypothesis that trade increases informality in industries that experience sudden foreign competition. This explains about a third of the increase in informality. Sectors with higher investment ratios are able to neutralize and reverse this effect. Acknowledgements: We would like to thank Sebastian Galiani and Guido Porto for kindly sharing the data on ad valorem import import tariffs by manufacturing sector. The data and codes are available upon request to the authors.

Keywords: Informality; Trade liberalization; Argentina (search for similar items in EconPapers)
JEL-codes: F16 J31 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-12
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Related works:
Journal Article: Informal Jobs and Trade Liberalisation in Argentina (2014)
Working Paper: Informal Jobs and Trade Liberalisation in Argentina (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ake:iiepdt:20133

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