Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46052 
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers No. 5251
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
In this paper, we explore empirically the role of openness, technology and labour market rigidity in the determination of the effect of the exchange rate on employment in Portugal. We develop an index that allows us to measure labour market flexibility at the sector level. This index shows that labour market flexibility has been increasing in all manufacturing sectors and that the labour market in high technology sectors is more flexible than in low technology sectors. We use this index in the estimation of an employment regression, focusing on the effect of exchange rate movements. Our estimates indicate that employment in lowtechnology sectors, with a high degree of trade openness and facing less rigidity in the labour market are more sensitive to movements in exchange rates.
Subjects: 
exchange rates
international trade
job flows
labour market rigidity
technology
JEL: 
J23
F16
F41
Document Type: 
Working Paper

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