Trade-induced local labor market shocks and asymmetrical labor income risk
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- dc.contributor.author Mello, Ursula
- dc.contributor.author Rodriguez Martinez, Tomas
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:09:31Z
- dc.date.available 2024-11-14T10:09:31Z
- dc.date.issued 2020-12-01
- dc.date.modified 2024-11-14T10:07:38Z
- dc.description.abstract This paper investigates the relationship between international trade and asymmetrical labor income risk. Using the case study of Brazil, we inspect how an increase in import penetration following the China shock impacted the distribution of idiosyncratic earnings changes across the country's local labor markets, depending on the initial sectoral composition of each region. We find that an increase in import penetration leads to a more disperse and negatively skewed distribution and that these effects can partially be explained by an increase in the volatility of hours worked following job and industry transitions. Moreover, the effect on dispersion grows larger as the lags between periods increase, suggesting a rise in the permanent risk. Through the lens of an incomplete market model, an unborn individual would be willing to forgo up to 4.4% of consumption to avoid the riskier labor market. The welfare cost is half if the higher-order risk is ignored.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1764
- dc.identifier.citation
- dc.identifier.uri http://hdl.handle.net/10230/68541
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1764
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword labor income risk
- dc.subject.keyword international trade
- dc.subject.keyword china shock
- dc.subject.keyword income process
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Trade-induced local labor market shocks and asymmetrical labor income risk
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper