McCaig, Brian and Nina Pavcnik. (2018) Export Markets and Labor Allocation in a Low-Income Country. American...

 

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McCaig, Brian and Nina Pavcnik. (2018) "Export Markets and Labor Allocation in a Low-Income Country." American Economic Review, 108(7): 1899-1941. An excerpt of the abstract is copied below: We study the effects of a positive export shock on labor allocation between the infor- mal, microenterprise sector and the formal firm sector in a low-income country. The United States-Vietnam Bilateral Trade Agreement led to large reductions in US tariffs on Vietnamese exports. We find that the share of manufacturing workers in Vietnam in the formal sector increased by 5 percentage points in response to the US tariff reduc- tions. . We estimate the gap in labor productivity within manufacturing across the informal and formal sectors. This gap and the aggregate labor productivity gain from the export-induced reallocation of workers across the two sectors are reduced when we account for worker heterogeneity, measurement error, and differences in labor intensity of production. Assume that the United States is a large country and answer the following: McCaig and Pavenik (2018) also found that aggregate productivity improyements in Viet- namese manufacturing sector can be attributed by the reallocation of workers towards more productive firms. How can we explain that? (max, 300 words; 10 points) McCaig, Brian and Nina Pavcnik. (2018) "Export Markets and Labor Allocation in a Low-Income Country." American Economic Review, 108(7): 1899-1941. An excerpt of the abstract is copied below: We study the effects of a positive export shock on labor allocation between the infor- mal, microenterprise sector and the formal firm sector in a low-income country. The United States-Vietnam Bilateral Trade Agreement led to large reductions in US tariffs on Vietnamese exports. We find that the share of manufacturing workers in Vietnam in the formal sector increased by 5 percentage points in response to the US tariff reduc- tions. . We estimate the gap in labor productivity within manufacturing across the informal and formal sectors. This gap and the aggregate labor productivity gain from the export-induced reallocation of workers across the two sectors are reduced when we account for worker heterogeneity, measurement error, and differences in labor intensity of production. Assume that the United States is a large country and answer the following: McCaig and Pavenik (2018) also found that aggregate productivity improyements in Viet- namese manufacturing sector can be attributed by the reallocation of workers towards more productive firms. How can we explain that? (max, 300 words; 10 points)

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Answer to Question part a The Most Favored Nation MFN or MFN rates are the tariffs that countries promise to impose on imports from other members of the World Trade Organisation unless the country is ... View the full answer