TY - JOUR
T1 - Firm dynamics, job turnover, and wage distributions in an open economy
AU - Cosar, A. Kerem
AU - Guner, Nezih
AU - Tybout, James
PY - 2016/3
Y1 - 2016/3
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=84960878837&partnerID=8YFLogxK
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U2 - 10.1257/aer.20110457
DO - 10.1257/aer.20110457
M3 - Article
AN - SCOPUS:84960878837
SN - 0002-8282
VL - 106
SP - 625
EP - 663
JO - American Economic Review
JF - American Economic Review
IS - 3
ER -