As mentioned in the introduction, there are several differences between our work and earlier literature. Unlike earlier work, our paper looks at a multitude of labor-market outcomes. Secondly, unlike previous studies, we include sample periods in our panel, such that for each country we cover up to 10 years before reforms and 10 years after reforms, which gives us greater confidence in our results, and allows us to track the dynamic response of labor markets to structural reforms. Thirdly, our focus is not limited to trade policies and we look at the impact of structural reforms in general (of which trade reforms are just one component) on labor-market outcomes. Finally, we are able to use credible (and seemingly valid) instrumental variables for our structural reform variable. These instruments are motivated by the theoretical literature on the political economy of structural reforms, and we provided econometric tests of their validity.

We have documented the trends on average (across countries) in our labor-market variables around the reform year for each country. This is done by controlling for country fixed effects and in another specification additionally controlling for real GDP, the labor force participation rate and the working age population. We have also run fixed-effects ordinary least squares as well as instrumental variables regressions of our labor-market outcomes on a reform dummy variable, a time trend, square of the time trend and the set of controls mentioned above.

Overall, we find that structural reforms lead to positive outcomes for labor, which is in sharp contrast to the widely held belief that reforms destroy jobs, increase inequality, make the rich richer and do not do much for the poor. Because we have controlled for the time trend and real GDP, our results show the impact of structural reforms on labor-market outcomes beyond what happens through its impact on growth. Redistributive effects in favor of workers, along the lines of the Stolper-Samuelson effect, may be at work.

# **References**

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- Amiti, Mary and Davis, Donald R. (2011). “Trade, Firms, and Wages: Theory and Evidence” _Review of Economic Studies_ 79, 1-36.

- Autor, David H.; Dorn, David and Hanson, Gordon H. (2013). “The China Syndrome: Local Labor Market Effects of Import Competition in the United States” _American Economic Review_ 103(6), 2121-68.

- Baldwin, Robert (2003). “Openness and Growth: What’s the Empirical Relationship?” NBER Working Paper No. 9578, The National Bureau of Economic Research, Cambridge, MA.

- Bassanini, Andrea and Duval, Romain (2006). “Employment Patterns in OECD Countries: Reassessing the Roles of Policies and Institutions” OECD Economics Department Working Paper No. 486, Organization for Economic Co-operation and Development, Paris.

- Bassanini, Andrea and Duval, Romain (2009). “Unemployment, Institutions and Reform Complementarities: Reassessing the Aggregate Evidence for OECD Countries” _Oxford Review of Economic Policy_ 25, 40-59.

Becker, Gary S. (1957). The Economics of Discrimination Chicago, IL: University of Chicago Press.

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