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Trade and Employment: From Myths to Facts ANNEX 6.A: MEASURING ADJUSTMENT IN OUTPUT AND CHANGES IN INEQUALITY LEVELS 6.A.1 Measuring adjustment in terms of output The metrics presented in equations (1) to (4) in the main text to capture adjustment in labour markets can also be developed to capture adjustment in terms of output. The starting point is again information on sectoral-level output generated, for example, with CGE simulations. We will refer to changes in sectoral output as where the subscript j represents sectors. Total change in output resulting from trade reform in an economy with n sectors can then be computed using: 250 (Q1) Where λ j represents the weight of a sector j in the total economy. As in the case of the employment measure in equation (1), the measure is only of limited use to reflect the extent of adjustment processes, as positive and negative output changes will cancel out. It is therefore preferable to use a variance-based measure of the type: (Q2) Taking the square root of provides a useful measure of variation across sectors. This measure can be calculated in a rather straightforward way with standard CGE models. An important weakness of this measure is that it does not capture output shifts across firms within the same sector. For a given change of output within a sector, Q2 would signal the same extent of adjustment if that change entails proportional shifts in output across firms or if it entails company failures and creation of new companies. Yet, adjustment of the second type is likely to be more costly for an economy, in particular if growing and shrinking firms are located in different regions. The importance of firm-level adjustments has been emphasized in recent trade literature. A more appropriate measure would therefore take into account within-sector adjustment: where and weight of firm i sector j , (Q3) A measure for total adjustment, capturing all changes in output, those within and across sectors, would look as follows: (Q4)
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Trade and Employment From Myths to
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Trade and Employment From Myths to
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PREFACE Trade negotiations -bilater
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Trade and Employment: From Myths to
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EDITORS AND CONTRIBUTORS EDITORS Ma
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ACKNOWLEDGEMENTS The editors wish t
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NEW EVIDENCE ON TRADE AND EMPLOYMEN
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Chapter 2: New evidence on trade an
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Region Annualized percentage change
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Region 1980 1985 1990 1995 2000 200
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Figure 2.4.b: Long-run association
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20 See Harrison and Rodriguez-Clare
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ASSESSING THE IMPACT OF TRADE ON EM
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Chapter 3: Assessing the impact of
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p * Chapter 3: Assessing the impact
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APPPENDIX 3.A: TABLES Chapter 3: As
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TRADE AND THE INFORMAL ECONOMY 4.1
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Chapter 4: Trade and the informal e
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For more than two decades, quantita
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GENDER ASPECTS OF TRADE 5.1 INTRODU
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and income-earning opportunities ge
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Figure 5.1: Description of gender i
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Chapter 5: Gender aspects of trade
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Page 209 and 210: A third view is that the type of jo
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