The CEPII Newsletter       
January 2020        

The French edition is slightly different as it also includes material available in French only  

Europe Monnaie & Finance Trade & Globalization Migrations Economic Policy Emerging Economies Competitivness & Growth Environment & Natural Ressources

Product-Level Trade Elasticities

Trade elasticity is a crucial parameter in evaluating the welfare impacts of trade liberalization. We estimate trade elasticities at the product level (6-digit of the Harmonized System comprising more than 5,000 product categories) by exploiting the variation in bilateral applied tariffs for each product category for the universe of available country pairs. This is done by constructing a panel of bilateral applied tariffs and bilateral trade covering the period 2001 to 2016. We address potential endogeneity issues as well as heteroskedasticity and selection bias due to zero flows. The obtained trade elasticities are centered around -5. We finally highlight the differences in the gains from trade arising from considering heterogeneous rather than average trade elasticities. All product level elasticities are made publicly available for sake of scrutiny and use by other researchers.
Lionel Fontagné, Houssein Guimbard & Gianluca Orefice

Minimum wages and the labor market effects of immigration

This paper exploits the non-linearity in the level of minimum wages across U.S. States created by the coexistence of federal and state regulations to investigate the labor market effects of immigration. We find that the impact of immigration on the wages and employment of native workers within a given state-skill cell is more negative in States with low minimum wages and for workers with low education and experience. That is, the minimum wage tends to protect native workers from competition induced by low-skill immigration. The results are robust to instrumenting immigration and state effective minimum wages, and to implementing a difference-in-differences approach comparing States where effective minimum wages are fully determined by the federal minimum wage to States where this is never the case.
Anthony Edo & Hillel Rapoport


ISSN: 1255-7072
Editorial Director : Sébastien Jean
Managing Editor : Dominique Pianelli