Essays on international trade and labor mobility

This dissertation combines three empirical papers in International Trade and Labor Economics. The first chapter uses Ukrainian firm-level data to examine whether firms induced to import from the European Union by trade liberalization upgrade the quality of goods that they export. I use the instrumental variable regression to address the endogeneity of firms' import status. Obtained results confirm that new importers substantially improved the quality of products sold abroad. After splitting the sample into heterogeneous and homogeneous good producers, I found that the effect of importing is strong and statistically significant for the former and insignificant for the latter. The obtained results indicate that trade liberalization can lead to considerable quality improvement in industries with the large scope for quality differentiation. In the second chapter, I analyze patterns of employment adjustment using a rich panel of Ukrainian manufacturing firms. The data suggest that manufacturing plants operate under considerable firing costs imposed by the employment protection legislation. Moreover, I find that privatized enterprises, similarly to public firms, are more constraint in making their employment adjustment decisions than new private firms. I estimate a model of dynamic labor demand with a flexible adjustment cost function. Obtained results indicate the presence of substantial firing costs in Ukrainian manufacturing. These costs are considerably larger for public and privatized enterprises. The third chapter uses data from the Census, ACS and CPS to document that a large part of the long-run reallocation of labor from the goods to the service sector in the U.S. took place within narrowly defined groups of workers. In particular, sectoral reallocation reflects a labor market trend that is distinct from the automatization of the goods sector and the increase in female labor force participation. We use this result to empirically evaluate the central prediction of job-search theory with on-the-job search: that there is an intrinsic link between the earnings structure and the rates at which employed workers change jobs. We find robust evidence that the earnings distribution in the service sector became more dispersed relative to the goods sector when the rate at which workers flew into the service sector rose.Arts, Faculty ofVancouver School of EconomicsGraduat