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Long-Run Effects of Trade Liberalization on Local Labor Markets : Evidence from South Africa (English)

This paper uses municipal-level data from South Africa for the period 1996–2011 to estimate the medium to long-run effects of trade liberalization on local labor markets. It finds that local labor markets that were more exposed to tariff cuts tended to experience slower growth in employment and income per capita than less exposed regions. The longer-term effects of trade liberalization on regional earnings are stronger than the medium-term effects, and tend to be more pronounced among municipalities that included the former homelands.


  • Author

    Bastos,Paulo S. R., Santos Villagran,Nicolas Eduardo

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  • Document Type

    Policy Research Working Paper

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  • Country

    South Africa,

  • Region

    Africa East,

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  • Doc Name

    Long-Run Effects of Trade Liberalization on Local Labor Markets : Evidence from South Africa

  • Keywords

    development research group; weighted average; weighted tariff; local labor market; impact of trade liberalization; price of mineral commodity; low labor force participation; active labor market policy; Active Labor Market Policies; change in employment; employment share; black population; increased import competition; effect of trade; applied tariff rates; labor market adjustment; regional trade agreement; public goods provision; degree of inequality; terms of trade; panel data set; investment in innovation; impact of liberalization; decline in poverty; employment protection legislation; design of policy; data on income; formal sector employment; price of gold; job search assistance; several other factors; geographical labor mobility; engine of growth; free trade agreement; impact of competition; share of labor; rise and fall; per capita income; simple average; disaggregated level; white population; standard error; trade shock; male population; baseline estimates; relative income; summary statistic; unskilled worker; displaced worker; agglomeration economy; econometric result; Trade Policy; Trade Policies; high share; racial group; average age; black citizens; capital adjustment; population census; labor demand; wage growth; subsistence agriculture; skill base; global demand; black community; mining industry; consumer welfare; black people; skill composition; local income; geographical mobility; other sectors; econometric method; geological survey; democratic election; empirical analysis; production structure; robustness check; regional impact; apartheid regime; regional disparity; black person; illegal migrant; manufacturing sector; import control; mineral reserve; mineral output; education level; export market; export promotion; descriptive statistic; cartographic data; export sector; local population; income growth; alternative employment; point estimate; natural logarithm; regression analysis; real income; sample period; population decline; observed change; demographic composition; labor policy; employment growth; Housing Policy; short term impact; short-term impact; policy option; inclusive policies; income redistribution; worker mobility; development perspective; job training; resource rent; local development; Labor Policies; Economic Policy; imported intermediate; domestic product; Industrial Policies; Industrial Policy; industry productivity; shaded areas; state land; import tariff; income gap; negative correlation; global economy; Natural Resources; empirical counterpart; exogenous shock; average earning; population movement; regional employment; adversely impact; skilled professional; sales worker; unskilled occupations; machine operator; Higher Education; aggregate gains; product price; product variety; productivity growth; international integration; optimal policy; protecting worker; smooth consumption; empirical evidence; administrative power; indian states; Labor Law; market economy; development policy; forced removals; high unemployment; manufacturing industry; wage loss; brazilian context; demand shock; manufacturing wage; blue-collar worker; informal employment; tradable sector; discouraged worker; government transfer; open access; conventional wisdom; recent evidence; employment data; white area; time horizon; freer trade; Forced Relocation; Independent States; equilibrium model; adjustment path; low consumption; rural district; aggregate welfare; relative poverty; geographic location



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Bastos,Paulo S. R. Santos Villagran,Nicolas Eduardo

Long-Run Effects of Trade Liberalization on Local Labor Markets : Evidence from South Africa (English). Policy Research working paper,no. WPS 9686 Washington, D.C. : World Bank Group.