Trade Liberalization and Working Conditions

Bastien Alvarez, Gianluca Orefice and Farid Toubal

No 20047, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines how trade liberalization-induced labor demand shocks affect wages and non-wage working conditions. Using exogenous trade shocks from EU enlargement and worker-level data, we find that export liberalization increases temporary contracts and atypical work schedules, particularly for production workers. However, it has no significant effect on wages, which may reflect firms’ ability to expand employment without raising pay due to labor supply elasticity and unemployment. Import liberalization weakly affects working conditions but, consistent with previous studies, lowers wages as firms face stronger competition and reduced labor demand.

Keywords: Wages; Employment (search for similar items in EconPapers)
JEL-codes: F15 F16 J30 J51 J81 (search for similar items in EconPapers)
Date: 2025-03
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