TY - JOUR
T1 - Trade exposure, export intensity, and wage volatility
T2 - Theory and evidence
AU - Traça, D.
PY - 2005/5
Y1 - 2005/5
N2 - This paper addresses the link between trade exposure and wage volatility. First, it shows, in a simple model, that trade exposure magnifies the impact of domestic productivity shocks on industry-specific labor demand, particularly for the less export-intensive industries, and that, if labor is not perfectly mobile, this implies a rise in wage volatility. Then, it tests these predictions, using industry data. The empirical results confirm that wage volatility increases with an industry's degree of openness, and that it declines with an increase in the industry's export intensity.
AB - This paper addresses the link between trade exposure and wage volatility. First, it shows, in a simple model, that trade exposure magnifies the impact of domestic productivity shocks on industry-specific labor demand, particularly for the less export-intensive industries, and that, if labor is not perfectly mobile, this implies a rise in wage volatility. Then, it tests these predictions, using industry data. The empirical results confirm that wage volatility increases with an industry's degree of openness, and that it declines with an increase in the industry's export intensity.
UR - http://www.scopus.com/inward/record.url?scp=20444400632&partnerID=8YFLogxK
U2 - 10.1162/0034653053970366
DO - 10.1162/0034653053970366
M3 - Article
AN - SCOPUS:20444400632
SN - 0034-6535
VL - 87
SP - 336
EP - 347
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 2
ER -