TY - BOOK ID - 84541159 TI - Trade Liberalization and Unemployment AU - Agénor, Pierre-Richard. AU - Aizenman, Joshua. PY - 1995 SN - 1462361188 1455206067 1281140767 9786613776648 1455257400 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Exports and Imports KW - Labor KW - Taxation KW - Employment KW - Unemployment KW - Wages KW - Intergenerational Income Distribution KW - Aggregate Human Capital KW - Aggregate Labor Productivity KW - Trade Policy KW - International Trade Organizations KW - Trade: General KW - Wages, Compensation, and Labor Costs: General KW - Demand and Supply of Labor: General KW - Labor Force and Employment, Size, and Structure KW - Labour KW - income economics KW - International economics KW - Public finance & taxation KW - Exports KW - Tariffs KW - Labor markets KW - International trade KW - Taxes KW - Labor force KW - Economic theory KW - Tariff KW - Labor market KW - Mexico KW - Income economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541159 AB - This paper examines the effect of trade reform on wages and unemployment in a two-sector, three-good economy in which labor is imperfectly mobile across sectors. Wages in the export sector are set so as to minimize turnover costs. The analysis shows that a reduction in tariffs, coupled with an adjustment in lump-sum taxes to equilibrate the government budget, lowers wages in all production sectors in the short and the medium run but has an ambiguous effect on unemployment. Although employment and production of exportables expand in the medium run, the unemployment rate may rise or fall depending on whether the elasticity of wages in the export sector with respect to wages in the nontraded goods sector is lower or greater than unity. Potentially adverse effects may be mitigated in the long run, however, as a result of induced shifts in the structure of production activities. ER -