TY - JOUR
T1 - Labor adjustment costs in a destination country
T2 - The case of Mexico
AU - Robertson, Raymond
AU - Dutkowsky, Donald H.
PY - 2002
Y1 - 2002
N2 - Rodrik [Rodrik, D., 1997. Has Globalization Gone Too Far? Institute for International Economics, Washington, DC.] argues that firms use the threat of moving to low-cost (generally developing) markets to make employment more flexible at home. Although a large literature documents significant adjustment costs in developed countries, we know little about their size and importance in developing countries that receive capital. We employ monthly Mexican data from the GATT-NAFTA period to estimate adjustment costs in Mexico. We consider adjustment costs for production and non-production workers and allow for asymmetry. While patterns of adjustment costs are similar as in developed countries, adjustment costs in Mexico are generally an order of magnitude smaller.
AB - Rodrik [Rodrik, D., 1997. Has Globalization Gone Too Far? Institute for International Economics, Washington, DC.] argues that firms use the threat of moving to low-cost (generally developing) markets to make employment more flexible at home. Although a large literature documents significant adjustment costs in developed countries, we know little about their size and importance in developing countries that receive capital. We employ monthly Mexican data from the GATT-NAFTA period to estimate adjustment costs in Mexico. We consider adjustment costs for production and non-production workers and allow for asymmetry. While patterns of adjustment costs are similar as in developed countries, adjustment costs in Mexico are generally an order of magnitude smaller.
KW - Adjustment cost
KW - Asymmetry
KW - Dynamic labor demand
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U2 - 10.1016/S0304-3878(01)00176-6
DO - 10.1016/S0304-3878(01)00176-6
M3 - Article
AN - SCOPUS:0036132506
SN - 0304-3878
VL - 67
SP - 29
EP - 54
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -