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Title:Manufacturing employment and exchange rates in the Portuguese economy: The role of openness, technology and labour market rigidity PDF Logo
Authors:Alexandre, Fernando
Bação, Pedro
Cerejeira, João
Portela, Miguel
Issue Date:2010
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5251
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
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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