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What drives short-run labor market volatility in offshoring industries evidence from northern Mexico during 2007-2009 (Inglês)

Recent research shows that employment in Mexico's offshoring maquiladora industries is twice as volatile as employment in their U.S. industry counterparts. The analyses in this paper use data from Mexico's social security records and U.S. customs between the first quarter of 2007 and the last quarter of 2009 to identify four channels through which economic shocks emanating from the United States were amplified when transmitted into Mexico's offshoring labor market of Northern Mexico. First, employment and imports within industries are complements, which is consistent with imports being used as inputs for the assembly of exportable goods within industries. That is, when imports fell during the crisis, employment in Mexico was reduced rather than protected by the fall of imports. Second, contrary to other studies, employment is more responsive than wages to trade shocks. Third, fluctuations in Mexico-U.S. trade were associated with changes in the composition of employment, with the skill level of workers rising during downturns and falling during upswings. This implies that the correlation between average wages and trade shocks is partly driven by labor-force compositional effects, which may obscure individual-worker wage flexibility. Fourth, trade shocks affecting related industries (industries linked by employment flows affect employment at least as much as own-industry trade shocks, thus amplifying employment volatility through the propagation of shocks across industries within Northern Mexico. Furthermore, the data suggest that the observed fluctuations in U.S.-Mexico trade at the onset of the Great Recession in the U.S. were not associated with pre-existing employment trends in Northern Mexico.


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    Kaplan,David Scott, Lederman,Daniel, Robertson,Raymond

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    Documento de trabalho sobre pesquisa de políticas

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    América Latina e Caribe,

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    What drives short-run labor market volatility in offshoring industries ? evidence from northern Mexico during 2007-2009

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    Poverty Reduction & Economic Management;trade shock;employment and wage data;impact of trade reforms;effect of trade;log wage;industry classification system;Social Security Records;bilateral trade data;employment in industry;response to shock;trade and employment;mobility worker;transmission of shocks;composition of employment;coefficient of variation;level of employment;adjustment to shock;effect of tariff;global financial crisis;global value chain;labor market dynamic;number of workers;world war ii;gross domestic product;Mobility of labor;formal labor market;labor market variable;standard deviation;adjustment cost;fixed effect;wage equation;trade variables;employment volatility;tradable sector;standard error;explanatory variable;trade flow;trade datum;maquiladora industry;labor mobility;average wage;total employment;employment equation;employment composition;wage effect;relative wage;wage determination;positive coefficient;positive shock;log exports;high volatility;skill composition;macroeconomic shock;business cycle;employment data;dynamic model;employment ratios;elastic supply;imported inputs;average change;wage changes;labor supply;average worker;lower-skilled worker;external trade;econometric result;ripple effect;empirical model;International Trade;firm productivity;human capital;industry wage;employment model;negative sign;relative change;lower-wage worker;employment effect;negative effect;wage increase;relative price;intermediate input;demand shock;point estimate;primary beneficiaries;small economy;industrial classification;employer having;positive value;average person;trade effect;maquiladora employment;estimated elasticity;skilled labor;formal employment;median coefficient;econometric model;web interface;monthly data;trade value;missing data;industrial chemicals;employment information;model specification;result data;positive correlation;wage control;future research;popular press;consumer durable;investment good;manufactured goods;merchandise trade;trade growth;economic relationship;trade model;small country;supply chain;local supply;federal district;average trade;independent variable;weighted average;low-skilled worker;negative value;assembly operation;global economy;economic volatility;nominal wage;estimation strategy;individual level;choice model;excess volatility;worker mobility;Wage flexibility;exportable goods;open access;development policy;complementary input;employment elasticity;estimation result;0 hypothesis;foreign demand;wage observation;



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