Impact de la libéralisation commerciale sur le marché du ... - Femise

Similarities between the two countries also include factor endowments which,
despite the different market sizes, have the same structures.
As to the specificities, each of these two economies has developed, depending on
their assets, a specific production structure, although at the level of some foreign
markets both countries face competition (mainly in terms of textile and
agribusiness).
The study of the impact of trade openness on the labor market was conducted from
two complementary perspectives. The first focuses on the adjustments of
employment and wages in response, firstly, to the increased of demand for local
products through the development of exports and, secondly, to the competition of
foreign products in the domestic market.
These adjustments may be approached by considering the tariff and nontariff
changes entailed by trade liberalization as part of a general equilibrium modeling.
The methodology adopted in this case is based on a general equilibrium modeling
distinguishing sectors in terms of the nature and extent of their involvement or not
in foreign trade.
The simulations related to the parameters reflecting the degree of openness in the
different sectors allow for assessing the impact on labor market balance and its
determinants.
The particularity of the general equilibrium approach resides in the fact that it
incorporates the dynamics of all sectors and their interactions following a
macroeconomic approach. The adjustments that occur as a result of opening up
shocks are seen from a global perspective, within the sectors themselves, and in
terms of the parameters that determine market behavior.
This macroeconomic approach, which is essential for analyzing the impact of
liberalization on the different categories of jobs and the relative wages of the
workforce according to the level of qualification, should be supplemented by a
microeconomic one. This means the examination of how enterprise players adjust
their labor demand and their wage costs to adapt to competition shock in response
to trade liberalization.
The development of this approach should therefore be based on the direct
observation of these players’ behavior through a series of variables, such as
production, added value, exports, employment structure and production costs. The
microeconomic behavior towards openness can be in this case approached through
FEM31-21R – executive summary