How wages and employment adjust to trade liberalization: Quasi-experimental evidence from Austria
Marius Brülhart and
Celine Carrere
Papers from World Trade Institute
Abstract:
Abstract We study the response of regional employment and nominal wages to trade liberalization, exploiting the natural experiment provided by the opening of Central and Eastern European markets after the fall of the Iron Curtain in 1990. Using data for Austrian municipalities, we examine differential pre- and post-1990 wage and employment growth rates between regions bordering the formerly communist economies and interior regions. If the ‘border regions’ are defined narrowly, within a band of less than 50 km, we can identify statistically significant liberalization effects on both employment and wages. While wages responded earlier than employment, the employment effect over the entire adjustment period is estimated to be around three times as large as the wage effect. The implied slope of the regional labor supply curve can be replicated in an economic geography model that features obstacles to labor migration due to immobile housing and to heterogeneous locational preferences.
Date: 2012-06-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)
Downloads: (external link)
http://www.wti.org/media/filer_public/28/f7/28f763 ... s_and_emplyement.pdf First version (application/pdf)
Related works:
Journal Article: How wages and employment adjust to trade liberalization: Quasi-experimental evidence from Austria (2012)
Working Paper: How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria (2012)
Working Paper: How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria (2011)
Working Paper: How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria (2011)
Working Paper: How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria (2011)
Working Paper: How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wti:papers:381
Access Statistics for this paper
More papers in Papers from World Trade Institute Contact information at EDIRC.
Bibliographic data for series maintained by Morven McLean ().