Trade and Employment: From Myths to Facts

1. Trade and Employment:From Myths to Facts Edited by Marion Jansen, Ralf Peters and José Manuel Salazar-Xirinachs

2. Trade and Employment: From Myths to Facts • Thematic edited volume; • Financed through EC-funded project: “Assessing and Addressing the Employment Effects of Trade”; • Country level work in four countries: Bangladesh, Benin, Guatemala and Indonesia. • Forthcoming research structured around three axes: • Agricultural trade and employment • Services trade and employment • Regional trade and employment

3. Trade and Employment: From Myths to Facts • Three objectives: • Take stock of existing evidence on trade and employment; • Contribute to design of tools to generate evidence on employment effects of trade; • Contribute to debate on coherent labour and trade policies

4. Trade and Employment: From Myths to Facts Six commissioned chapters: • New Evidence on Trade and Employment: An Overview Margaret McMillan and IñigoVerduzco • Assessing the Impact of Trade on Employment BillGibson • Trade and the Informal Economy AnushreeSinha • Gender Aspects of Trade GünseliBerik • Trade Adjustment Costs and Assistance: The Labour Market Dynamics Joseph Francois, Marion Jansen and Ralf Peters • Trade Diversification: Drivers and Impacts Olivier Cadot, CélineCarrère and Vanessa Strauss-Kahn

5. Trade and Employment: From Myths to Facts Main findings: • Allocativeefficiency depends on institutional settings (chapter 2); • Job creation in the exporting sector may be disappointing (chapter 2); • The informal economy cannot be ignored (chapter 4); • Trade does not necessarily reduce gender gaps (chapter 5); • Country specifics determine how and to which extent trade liberalization contributes to increased diversification (chapter 7). Taking stock of existing evidence

6. Trade and Employment: From Myths to Facts Export concentration: Theil Indices

7. Trade and Employment: From Myths to Facts Main messages: • Use economy-wide rather than partial equilibrium models (chapter 3); • Getting the micro-foundations right is important (chapter 3); • CGEs for developing countries should model the informal economy explicitly (chapter 4); • More emphasis should be given to employment effects at the occupational rather than industry level (chapter 2). • Standard CGE simulations generate information that can be useful to roughly assess labour adjustment costs to trade (chapter 6); Generating Facts: Providing Tools to Generate More Evidence

8. Output YT YT,A Y(t) Y0 time Trade and Employment: From Myths to Facts Expected long-run equilibrium without adjustment costs Expected long-run equilibrium With adjustment costs Allocative efficiency depends on adjustment process

9. Trade and Employment: From Myths to Facts Standard deviation of sector changes in employment (percentage)

10. Trade and Employment: From Myths to Facts Main findings: • Strong social protection systems are preferable to targeted adjustment assistance (chapter 6); • Governments have a role in helping firms to survive or grow … (chapter 7); • … in particular in the case of informal firms (chapter 4); • Gender aspects of trade need to be addressed through gender equity policies (chapter 5); • Education and skills policies prepare the ground for the development of new export products (chapter 7). Coherent policy making

11. Trade and Employment:From Myths to Facts Available at: http://www.ilo.org/trade