30.01.2013 Views

Trade and Employment From Myths to Facts - International Labour ...

Trade and Employment From Myths to Facts - International Labour ...

Trade and Employment From Myths to Facts - International Labour ...

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

<strong>Trade</strong> <strong>and</strong> <strong>Employment</strong>: <strong>From</strong> <strong>Myths</strong> <strong>to</strong> <strong>Facts</strong><br />

6. <strong>Trade</strong> Adjustment Costs <strong>and</strong> Assistance:<br />

The <strong>Labour</strong> Market Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213<br />

Joseph Francois, Marion Jansen, <strong>and</strong> Ralf Peters<br />

6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213<br />

6.2 Defining adjustment costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214<br />

6.3 Adjustment costs: measurement <strong>and</strong> determinants . . . . . . . . . . . . 218<br />

6.3.1 Fac<strong>to</strong>rs determining adjustment costs . . . . . . . . . . . . . . . . . . . . . 219<br />

6.3.2 Measuring adjustment costs: Ex-post analysis . . . . . . . . . . . . . . 220<br />

6.3.3 Measuring adjustment costs: CGE models. . . . . . . . . . . . . . . . . 224<br />

6.4 Adjustment assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228<br />

6.4.1 Definition of trade adjustment assistance . . . . . . . . . . . . . . . . . . 228<br />

6.4.2 Reasons for adjustment assistance . . . . . . . . . . . . . . . . . . . . . . . 229<br />

6.4.3 <strong>Labour</strong> market policies <strong>to</strong> facilitate adjustment. . . . . . . . . . . . . . 231<br />

6.4.4 Specific trade adjustment assistance . . . . . . . . . . . . . . . . . . . . . . 235<br />

6.4.5 <strong>Trade</strong> policies addressing adjustment costs . . . . . . . . . . . . . . . . . 238<br />

6.4.6 Other domestic policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241<br />

6.5 Conclusions <strong>and</strong> Policy Recommendations. . . . . . . . . . . . . . . . . . . 242<br />

7. <strong>Trade</strong> Diversification: Drivers <strong>and</strong> Impacts . . . . . . . . . . . . . . . . . . . 253<br />

Olivier Cadot, Céline Carrère <strong>and</strong> Vanessa Strauss-Kahn<br />

7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253<br />

7.2 Measuring diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254<br />

7.2.1 Concentration/Diversification indices . . . . . . . . . . . . . . . . . . . . 254<br />

7.2.2 <strong>Trade</strong>-expansion margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255<br />

7.2.3 Alternative margins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256<br />

7.3 What do we learn from these measures? . . . . . . . . . . . . . . . . . . . . . 258<br />

7.3.1 Trends in diversification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258<br />

7.3.2 Which margin matters? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259<br />

7.4 Drivers of diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261<br />

7.4.1 Quantitative insights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261<br />

7.4.2 <strong>Trade</strong> liberalization as a driver of diversification . . . . . . . . . . . . 268<br />

7.4.3 Diversification, spillovers <strong>and</strong> industrial policy . . . . . . . . . . . . . 273<br />

7.5 Export diversification, growth <strong>and</strong> employment . . . . . . . . . . . . . . . 277<br />

7.5.1 Diversification <strong>and</strong> productivity:<br />

An issue of causality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277<br />

x

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!