Trade, Jobs, and Worker Welfare

Paulo Bastos, Erhan Artuc and Eunhee Lee

No 16009, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the welfare effects of international trade on workers in a new dynamic general equilibrium discrete choice model of labor mobility, where the workers' choice set of jobs is endogenous. We exploit differential exposure of sectors and regions to destination-specific demand shocks to estimate the impacts of exports on wages, employment, and labor mobility, using employer-employee panel data for Brazil. We employ the same empirical strategy to estimate structural parameters and the different components of changes in model-implied worker welfare. Counterfactual simulations show that the endogenous number of job options significantly magnifies the welfare effects of trade shocks.

Keywords: Trade shocks; Jobs; Labor mobility; Adjustment costs; Worker welfare (search for similar items in EconPapers)
JEL-codes: F16 F66 J6 (search for similar items in EconPapers)
Date: 2021-04
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Working Paper: Trade, Jobs, and Worker Welfare (2019)
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