Abstract
The self-employed do not adapt to trade shocks like the salaried, making the most documented responses - unemployment, informality - not automatic in regions with prevalent self-employment. To study this, I use a used clothing import protection policy implemented by Rwanda which hit a self-employed retailers labor market. I provide evidence of this, put forward self-employment-specific adaptation strategies, formalize them through a time allocation framework and test the model’s predictions that workers with lower quality of outside options adapt less, along with workers who can leverage their spouse’s labor to compensate for the shock’s effect. I uncover sizeable heterogeneity in women’s time allocation responses relative to men, suggesting gendered effects of gender-neutral trade policy.
Romaine Loubes
PhD candidate in Economics
Romaine Loubes is a doctoral candidate in economics at the Paris School of Economics, working in trade, labor and development.