Trade Liberalisation and Working Conditions

(coauthored with Bastien Alvarez and Gianluca Orefice)

We show that export liberalisation leads to a permanent increase in temporary employment and nonstandard work schedules, rather than purely cyclical adjustment. Workers in high-exposure regions are 6.7 percentage points more likely to hold temporary contracts than those in low-exposure regions, with effects persisting for more than a decade after integration. To rationalise these findings, we develop a model in which trade liberalisation raises steady-state revenue volatility by increasing firms’ exposure to foreign demand shocks. This induces a permanent shift in firms’ optimal employment composition toward temporary workers, even in the long run once adjustment is complete. 

By contrast, import liberalisation primarily reduces wages and has limited effects on employment composition. Overall, our results show that trade liberalisation alters not only the level but also the fundamental structure of employment, with lasting implications for job quality

Registration for bilateral, lunch or dinner

Lunch will be provided. If you would like to meet the guest speaker for a bilateral, join for lunch or dinner, then please register by filling in the registration form.