the income loss in regions that were adversely hit by trade. In that case, the uptake of social security disability insurance was substantially larger than the uptake of unemployment and trade adjustment assistance support.

**_Effects on job training_** We assess whether workers of firms suffering more adverse GFC foreign shocks were more likely to receive job training. The individual training records contain information on different training categories. Technical upgrading courses are aimed at workers seeking to update, deepen, or complement the professional skills they have acquired in a specific occupation or field or work. Their duration varies between 40 and 120 hours. Other training categories (Habitation, Qualification, initiation courses and Apprenticeships) are aimed at training a new generation of practitioners of a given occupation or profession.

We estimate Equation (2) using as outcomes the workers’ probability of receiving any type job training and the probability of receiving technical upgrading courses. The estimates presented in columns (6) and (7) of Table 9 do not show significant increases in the likelihood of receiving training for workers in firms suffering a worse GFC foreign shock.

# **VII. Responses in a Different Labor Market**

Our evidence so far shows persistent effects of foreign shocks on workers’ employment and wages in Brazil, firm restructuring through occupational changes and firm scarring in terms of exit as well as a contraction in revenues, employment, and productivity. One may be concerned about the external validity of these results, in particular whether the responses to foreign shocks would be similar in a labor market with (even) less flexibility than that of Brazil. To address this concern, we consider the case of Ecuador, a developing country in Latin America with a more rigid labor market de jure and de facto than Brazil.<sup>44</sup> We compiled a rich administrative data set from Ecuador that merges employer-employee matched data with education census, firm registry data, and firm-level customs data for the 2006-2017 period (details are provided in Appendix E). Similar data have recently been used by Ad ̃ao et al. (2022). We replicate the analysis of the impact of firms’ GFC foreign shocks and of the mechanisms driving long-run effects using these data.

The worker responses to firms’ foreign shocks due to the GFC in Ecuador are qualitatively similar to those in Brazil: persistent reductions in worker employment occurring only for the

> 44Ecuador’s labor market is more rigid than that of Brazil in areas related to firing costs according to recent Doing Business indicators. When dismissing a redundant worker, a firm in Ecuador must notify or consult a third party whereas that is not necessary in Brazil and it also must pay substantially larger severance payments. For example for workers employed for 10 years (or more) at the firm such payments consist in more than 50 weeks of salary in Ecuador but only 17 weeks of salary in Brazil. Measures of job turnover (creation and destruction) based on the employer-employee data sets show a substantially larger de facto job turnover for Brazil than Ecuador prior to the GFC. As of 2007, job creation and destruction rates in Brazil were 16% and 3%, while they were 4% and 2.6%, respectively, in Ecuador.

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