Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis

We study the effects of Taiwan’s accession to the WTO in 2002 on the labor market dynamics in Taiwan during 1995–2020. Based on the dynamic hat algebra of Caliendo, Dvorkin and Parro (2019), we modify the framework to allow for differently skilled labor inputs (low, middle, high) and sector-skill dyna...

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Main Authors: CHANG, Pao-Li, CHEN, Yi-Fan, HSU, Wen-Tai, YI, Xin
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Language:English
Published: Institutional Knowledge at Singapore Management University 2022
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Online Access:https://ink.library.smu.edu.sg/soe_research/2613
https://ink.library.smu.edu.sg/context/soe_research/article/3612/viewcontent/dynamic_labor_reduced_size.pdf
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spelling sg-smu-ink.soe_research-36122022-10-03T08:17:16Z Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis CHANG, Pao-Li CHEN, Yi-Fan HSU, Wen-Tai YI, Xin We study the effects of Taiwan’s accession to the WTO in 2002 on the labor market dynamics in Taiwan during 1995–2020. Based on the dynamic hat algebra of Caliendo, Dvorkin and Parro (2019), we modify the framework to allow for differently skilled labor inputs (low, middle, high) and sector-skill dynamic choice by workers. We map the model to the labor-market transition data in Taiwan (based on quasi-longitudinal household surveys), the country-sector-specific skill shares in production, and the bi-lateral trade flows and import tariffs, for 61 economies and 22 sectors for the period 1995–2007. We study the counterfactual dynamics if the bilateral tariffs related to Tai-wan’s imports and exports were rolled back to their levels in 1995, and calculate the cumulative effects on the employment shares and on the welfare of workers by sector and skill. We find the tariff reductions during this period to explain very much the ob-served expansion of Taiwan’s MCEE and business services sectors in their employment shares, and the growing share of high-skilled workers in Taiwan’s labor composition. We also conduct alternative counterfactuals to evaluate the effects of bilateral tariff concessions between Taiwan and China only, China’s WTO accession, and combined accessions by both Taiwan and China. We find bilateral tariff concessions to account for the bulk of the effects of Taiwan’s WTO accession, illustrating the importance of China to Taiwan in the latter’s trade structure. 2022-08-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/2613 https://ink.library.smu.edu.sg/context/soe_research/article/3612/viewcontent/dynamic_labor_reduced_size.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University WTO; Dynamic Quantitative Analysis Labor Market Dynamics Welfare Effects Mobility Frictions Skill Upgrading International Economics
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic WTO; Dynamic Quantitative Analysis
Labor Market Dynamics
Welfare Effects
Mobility Frictions
Skill Upgrading
International Economics
spellingShingle WTO; Dynamic Quantitative Analysis
Labor Market Dynamics
Welfare Effects
Mobility Frictions
Skill Upgrading
International Economics
CHANG, Pao-Li
CHEN, Yi-Fan
HSU, Wen-Tai
YI, Xin
Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
description We study the effects of Taiwan’s accession to the WTO in 2002 on the labor market dynamics in Taiwan during 1995–2020. Based on the dynamic hat algebra of Caliendo, Dvorkin and Parro (2019), we modify the framework to allow for differently skilled labor inputs (low, middle, high) and sector-skill dynamic choice by workers. We map the model to the labor-market transition data in Taiwan (based on quasi-longitudinal household surveys), the country-sector-specific skill shares in production, and the bi-lateral trade flows and import tariffs, for 61 economies and 22 sectors for the period 1995–2007. We study the counterfactual dynamics if the bilateral tariffs related to Tai-wan’s imports and exports were rolled back to their levels in 1995, and calculate the cumulative effects on the employment shares and on the welfare of workers by sector and skill. We find the tariff reductions during this period to explain very much the ob-served expansion of Taiwan’s MCEE and business services sectors in their employment shares, and the growing share of high-skilled workers in Taiwan’s labor composition. We also conduct alternative counterfactuals to evaluate the effects of bilateral tariff concessions between Taiwan and China only, China’s WTO accession, and combined accessions by both Taiwan and China. We find bilateral tariff concessions to account for the bulk of the effects of Taiwan’s WTO accession, illustrating the importance of China to Taiwan in the latter’s trade structure.
format text
author CHANG, Pao-Li
CHEN, Yi-Fan
HSU, Wen-Tai
YI, Xin
author_facet CHANG, Pao-Li
CHEN, Yi-Fan
HSU, Wen-Tai
YI, Xin
author_sort CHANG, Pao-Li
title Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
title_short Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
title_full Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
title_fullStr Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
title_full_unstemmed Labor market implications of Taiwan’s accession to the WTO: A dynamic quantitative analysis
title_sort labor market implications of taiwan’s accession to the wto: a dynamic quantitative analysis
publisher Institutional Knowledge at Singapore Management University
publishDate 2022
url https://ink.library.smu.edu.sg/soe_research/2613
https://ink.library.smu.edu.sg/context/soe_research/article/3612/viewcontent/dynamic_labor_reduced_size.pdf
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