American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy
American Economic Review
vol. 106,
no. 3, March 2016
(pp. 625–63)
Abstract
This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and wage distributions. It uses establishment-level data from Colombia to estimate an open economy dynamic model that links trade to job flows and wages. Counterfactual experiments imply that Colombia's integration with global product markets increased its national income at the expense of higher unemployment, greater wage inequality, and increased firm-level volatility. In contrast, contemporaneous labor market reforms dampened the increase in unemployment and aggregate job turnover. The results speak more generally to the effects of globalization on labor markets. (JEL F13, F16, F66, J31, J63, O15, O19)Citation
Coşar, A. Kerem, Nezih Guner, and James Tybout. 2016. "Firm Dynamics, Job Turnover, and Wage Distributions in an Open Economy." American Economic Review, 106 (3): 625–63. DOI: 10.1257/aer.20110457Additional Materials
JEL Classification
- F13 Trade Policy; International Trade Organizations
- F16 Trade and Labor Market Interactions
- F66 Economic Impacts of Globalization: Labor
- J31 Wage Level and Structure; Wage Differentials
- J63 Labor Turnover; Vacancies; Layoffs
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O19 International Linkages to Development; Role of International Organizations