Openness to international competition can lead to enhanced resource allocation in the end. While factor reallocation is essential if net benefits are to be derived from trade liberalization, the process generates costs both for transitioning workers and for employers undergoing personnel turnover. Net welfare gains depend on adjustment costs. Understanding of these issues has been hampered by data limitations. In this paper, we overcome some of these limitations by using new, harmonized measures on job creation and destruction for a number of countries in Latin America.
Effects of Tariffs and Real Exchange Rates on Job Reallocation: Evidence from Latin AmericaJohn C. Haltiwanger, Adriana Kugler, Maurice Kugler, Alejandro Micco and Carmen Pages ,
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Journal of Policy Reform