The Labour Market Consequences of the Canada-U.S. Free Trade Agreement

Gaston, Noel; Trefler, Daniel

doi:10.2307/136358

Cited by 85 publications

(65 citation statements)

References 5 publications

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“…It follows that industrial employment and pollution emissions are highly and positively corre- Free Trade Agreement (see Gaston and Trefler, 1997). In non-OECD countries in which manufacturing employment has grown rapidly (e.g., Singapore) there has been a corresponding increase in pollution emissions.…”

Section: Deindustrialisation and The Environmentmentioning

confidence: 99%

Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector

2006

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Deindustrialisation, stagnant real incomes of production workers and increasing inequality are latter-day features of many economies. It's common to assume that such developments pressure policy-makers to relax environmental standards. However, when heavily polluting industries become less important economically, their political importance also tends to diminish. Consequently, a regulator may increase the stringency of environmental policies. We find that declining industrial employment translates into stricter environmental standards. In contrast to previous studies, but consistent with our argument, we find that greater income inequality is associated with policies that promote a cleaner environment.

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Section: Deindustrialisation and The Environmentmentioning

confidence: 99%

Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector

2006

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“…An advantage of this approach is that it also controls for endogenous exit from the sample, which is assumed to occur when productivity falls below a threshold. 11 In particular, plants with more capital, such as importers, are likely to allow for greater reductions in productivity, making the exit threshold a decreasing function of capital. Following Olley and Pakes (1996), we estimate a Cobb-Douglas production function, taking the logs of equation 2.1, which we denote by small letters,…”

Section: Productivitymentioning

confidence: 99%

“…The import data at the plant level enables us to take account of this. Other studies on output tariffs and productivity include Topalova (2004), Head and Ries (1999), Krishna and Mitra (1998), Gaston and Trefler (1997), Tybout and Westbrook (1995), Harrison (1994), Levinsohn (1993) and Tybout et al (1991).…”

Section: Introductionmentioning

confidence: 99%

Trade Liberalization, Intermediate Inputs, and Productivity: Evidence From Indonesia

2005

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Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia* This paper estimates the effects of trade liberalization on plant productivity. In contrast to previous studies, we distinguish between productivity gains arising from lower tariffs on final goods relative to those on intermediate inputs. Lower output tariffs can produce productivity gains by inducing tougher import competition whereas cheaper imported inputs can raise productivity via learning, variety or quality effects. We use Indonesian manufacturing census data from 1991 to 2001, which includes plant level information on imported inputs. The results show that the largest gains arise from reducing input tariffs. A 10 percentage point fall in output tariffs increases productivity by about 1%, whereas an equivalent fall in input tariffs leads to a 3% productivity gain for all firms and an 11% productivity gain for importing firms. Abstract This paper estimates the effects of trade liberalization on plant productivity. In contrast to previous studies, we distinguish between productivity gains arising from lower tariffs on final goods relative to those on intermediate inputs. Lower output tariffs can produce productivity gains by inducing tougher import competition whereas cheaper imported inputs can raise productivity via learning, variety or quality effects. We use Indonesian manufacturing census data from 1991 to 2001, which includes plant level information on imported inputs. The results show that the largest gains arise from reducing input tariffs. A 10 percentage point fall in output tariffs increases productivity by about 1 percent, whereas an equivalent fall in input tariffs leads to a 3 percent productivity gain for all firms and an 11 percent productivity gain for importing firms.

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“…15 The range of their scale estimates are provided in Section 4.2. average cost curves at low output levels, but very flat long run average cost curves at higher output levels. 16 Despite the relatively late maturation of the Canadian manufacturing sector, early twentieth century Canadian technology appears to have been similar to that employed by U.S.…”

Section: The Formation Of Optimistic Expectationsmentioning

confidence: 99%

“…This work adopts an ex post perspective in an effort to determine what effect trade liberalization has had on economic variables, such as productivity (Harrison, 1994, Tybout andWestbrook, 1995, Bernard andJensen, 1999), wages and employment (Beaulieu, 2000, Gaston andTrefler, 1997), plant production levels (Head and Ries, 1999), and the trade off between short run adjustment costs and long run efficiency gains (Trefler, 2001). In general, these studies have found that the costs and benefits associated with trade liberalization are both difficult to isolate, and unlikely to be substantial.…”

Section: Introductionmentioning

confidence: 99%

An Empty Promise: Average Cost Savings and Scale Economies among Canadian and American Manufacturers, 1910-1988

Keay¹

2003

Southern Economic Journal

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During the debate that led up to the implementation of a bilateral free trade agreement between Canada and the U.S. on January 1, 1989, much was made of economists' claims that both nations could expect significant welfare improvements as a result of the removal of tariffs on traded goods. The welfare gains were expected to flow from average cost savings associated with the exploitation of scale economies. In this paper we show that it was overly optimistic to predict substantive reductions in average costs in response to any increases in the scale of production among Canadian or American manufacturing firms. Therefore, ex ante we should have expected trade liberalization between Canada and the U.S. to have had only muted scale, average cost, and welfare effects.J.E.L. Classification: N120, N620, L610.

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The Labour Market Consequences of the Canada-U.S. Free Trade Agreement

Cited by 85 publications

References 5 publications

Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector

Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector

Trade Liberalization, Intermediate Inputs, and Productivity: Evidence From Indonesia

An Empty Promise: Average Cost Savings and Scale Economies among Canadian and American Manufacturers, 1910-1988

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