DP16009 Trade, Jobs, and Worker Welfare
|Author(s):||Erhan Artuc, Paulo Bastos, Eunhee Lee|
|Publication Date:||April 2021|
|Keyword(s):||adjustment costs, jobs, Labor Mobility, Trade Shocks, worker welfare|
|JEL(s):||F16, F66, J6|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16009|
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.