International trade, job training, and labor reallocation

Abstract

A large literature studies the impact of increased import competition on workers' outcomes, however, relatively few studies examine which policies can aid workers displaced by trade. In this article, we evaluate the impact of an industrial job training program in Brazil on workers displaced from manufacturing sectors. We find that industrial training increases the probability of re-entry into the formal labor market 1 year after displacement by about 17 percentage points and is even more effective for workers displaced from sectors exposed to high import competition. This effect is mainly associated with workers switching sectors and occupations after training. © 2022 John Wiley & Sons Ltd.

Keywords

Author Keywords

job training displaced workers matched employer-employee data trade exposure

Index Keywords

training policy implementation International trade trade flow trade policy trade relations

Author Affiliations

Inter-American Development Bank, Washington, D.C., DC, United States

Funding & Acknowledgements

Inter-American Development Bank, IDB

We thank Claire Brunel, Matías Busso, Juan Carlos Hallak, Mauricio Mesquita Moreira, Emanuel Ornelas, Nina Pavcnik, Lorenzo Caliendo, Ernesto Stein, and two anonymous referees for their helpful comments. We also thank participants at the Washington Area Trade Symposium (WAITS). We especially thank the Brazilian National Service for Industrial Training (SENAI) and the Brazilian Ministry of Labor and Employment, who granted us access to the datasets used in the analysis. We would also like to thank Felipe Morgado and Rosangela Maria Costa from SENAI, and seminar participants at the IDB and other conferences. Nathaniel Russell and Mayra Alejandra Ramirez provided excellent research assistance.

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International trade, job training, and labor reallocation

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