The substantial literature investigating the links between trade, trade policy, and labour market outcomes has generated a number of stylized facts, but many open questions remain. A common fi nding is that much of the shorter-run impacts of trade and reforms involve reallocation of labour or wage impacts within sectors. Wage responses to trade and trade reforms are generally greater than emplo...

In a two sector extension of the Mortensen-Pissarides model of endogenous job destruction, it is shown that trade liberalization increases both job creation and job destruction in the import competing sector and reduces them in the export sector. Since trade liberalization increases unemployment in the import competing sector and reduces it in the export sector, the impact on economywide unempl...

This paper provides empirical evidence for the interaction between firm-level total factor productivity and trade liberalization as key determinants of firm-level job destruction caused by trade. We also test some key theoretical predictions from Melitz (2003), whose model is used to derive an explicit equation relating firm productivity and trade-induced labor layoff when a country liberalizes...

Article history: Received 2 July 2012 Received in revised form 7 November 2013 Accepted 7 November 2013 Available online 22 November 2013 This paper proposes a simple multi-industry trade model with search frictions in the labor market. Unimpeded access to global financial markets enables capital owners to invest abroad, thereby fostering unemployment at the extensive industry margin. Whether a...

This paper investigates the cross-occupation effect of offshorability on wage rates by examining the occupation switching behavior of workers previously employed in highly offshorable occupations. Instead of looking at the labor market for occupations that are traditionally vulnerable to import competition, we study the destination occupations for the workers displaced from import-competing sec...

This paper develops a model of FDI with reverse imports examining the impact of FDI on the home economy through the “hollowing out” effect on the domestic employment. A foreign wage threshold exists. If the foreign wage is lower than the threshold, the home firm chooses FDI. The threshold depends on a FDI fixed cost and a demand parameter. A welfare analysis shows that another foreign wage thre...

Using an administrative data set containing daily information on individual workers’ employment histories, we investigate how workers’ labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing is fou...

Do international trade and technological change influence how firms create incentives for human capital? I present a model that incorporates agency problems into a framework with firm heterogeneity and human capital. My model indicates that trade liberalizations and skill-biased technological change alter the way how the largest firms in an economy incentivize their managers. Increases in manag...

A by now large literature in regional economics has greatly improved our understanding of the determinants of the observed spatial disparities in productivity. However, this literature neglects what seems to be a robust and persistent fact accompanying regional productivity differences: high productivity regions also have lower unemployment than low productivity regions. In this paper, we set o...

In this paper, we first present a simple theoretical model of globalization between similar countries to motivate the empirical work that follows. Specifically, we examine the linkages between trade volumes and relative wages in a specialization model along the lines of Ethier (1982). The core of the empirical analysis involves bivariate time-series analysis. There we find some evidence of a re...