Eunhee Lee, University of Maryland
"Trade, Jobs, and Worker Welfare"
Abstract
This paper introduces a new framework to quantify the effect of international trade on worker's welfare through labor mobility. Our framework features various determinants of labor mobility and identifies how trade shocks impact those determinants endogenously. Focusing on wage and the number of jobs as two key determinants of labor mobility, we build a structural model of labor mobility where international trade affects not only wage but also the number of job opportunities. We then combine the local labor market approach to estimate the key structural parameters of our model. Our model delivers a sufficient statistic of change in worker's welfare, which can be easily estimated using a Bartik-type instrument.
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