ICEF/FES Job Market Seminar by Konstantin Egorov (Penn State)
On Tuesday, February 6 at 12.10, room 3211 (Shabolovka str. 26) ICEF and FES held the Job Market Seminar.
Speaker: Konstantin Egorov (Penn State)
Theme: "The Effect of Trade on Workers’ Earnings: Role of Unemployment"
Venue: Shabolovka st., 26, room 3211
Abstract: I explore the incidence and duration of unemployment spells induced by foreign competition. Using German administrative data, I begin by demonstrating two basic facts. First, as German imports from China and Eastern Europe surged during the 1990s and 2000s, longer unemployment spells accounted for about one-third of workers’ import-induced earnings losses. Second controlling for 3-digit industry, the duration of unemployment spells became relatively higher for workers in low-wage occupations. This difference accounted for more than a half of the heterogeneity in earnings losses between low- and high-wage occupations. I next build a dynamic search model with heterogeneous workers that explains these patterns. The model allows unemployment outcomes to be influenced by general equilibrium effects of costly worker reallocation between sectors and occupations. Calibrated to pre-shock quarterly data, it successfully predicts trade-induced relative changes in unemployment spells of workers in different occupations. Counterfactual experiments suggest that unemployed workers in sectors not directly affected by foreign competition have also experienced big changes in duration of unemployment spells.
Everyone interested is welcome to attend!