Labor Adjustment Costs Across Sectors and Regions

25 Pages Posted: 5 Nov 2017

See all articles by Marcio Cruz

Marcio Cruz

World Bank; Federal University of Parana (UFPR) - Departamento de Economia

Emmanuel Milet

University of Geneva

Marcelo Olarreaga

University of Geneva; Centre for Economic Policy Research (CEPR)

Date Written: November 2, 2017

Abstract

This paper estimates the mobility costs of workers across sectors and regions in a large sample of developing countries. The paper develops a new methodology that uses cross-sectional data only. This is motivated by the fact that panel data typically are not available for most developing countries. The results suggest that, on average, sector mobility costs are higher than regional mobility costs. The costs of moving across sectors and regions are higher than the costs of moving across only sectors or only regions. In poorer countries, workers face higher mobility costs. The paper provides evidence suggesting that mobility costs, particularly across sectors, are partially driven by information assimetries and access to the Internet can mitigate these costs.

Keywords: International Trade and Trade Rules

Suggested Citation

Cruz, Marcio and Milet, Emmanuel and Olarreaga, Marcelo, Labor Adjustment Costs Across Sectors and Regions (November 2, 2017). World Bank Policy Research Working Paper No. 8233, Available at SSRN: https://ssrn.com/abstract=3065056

Marcio Cruz (Contact Author)

World Bank ( email )

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Washington, DC 20433
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Federal University of Parana (UFPR) - Departamento de Economia ( email )

Av. Pref. Lothario Meissner, 632
Centro
Curitiba - PR, 80060-000
Brazil

Emmanuel Milet

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

Marcelo Olarreaga

University of Geneva ( email )

40 Boulevard du Pont-d'Arve
Genève, CH - 1205
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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