Dix-Carneiro and Kovak Trade Reform and Regional Dynamics employment, we calculate an alternate measure, the share of formally employed months spent away from the initial region: This measure mitigates selection concerns because the vast majority of individuals in our sample spend at least one month in the formal sector between 1990 and 2009. Figure 17 once again shows no significant relationship. In fact, if anything, the positive point estimates suggest that more negative local shocks lower the probability of obtaining formal employment outside the initial region.

To study in-migration, we construct separate samples of all formally employed individuals in 1989, 1995, 2000, 2005, and 2009 using the same sampling rates described above. For each of these samples, we record each worker’s location one year earlier, five years earlier, and in 1989, just before liberalization began. We control for pre-existing migration patterns using three-year migration rates from 1986-89 and other initial regional characteristics such as earnings and employment growth. The results appear in Table 6. All point estimates are positive, indicating larger declines in inmigration to harder hit regions. For example, the coefficient 0.317 in column (2) for 1995 indicates that a region facing a 10 percentage point larger tariff decline experienced a 3.17 percentage point larger decrease (smaller increase) in the share of in-migrants between 1990 and 1995. Longer timeframes permit larger migration responses, as indicated by decreasing magnitude coefficients moving from left to right across columns and increasing coefficients moving down column (1), where 1989 is always the base year. These in-migration responses coupled with the lack of outmigration responses are consistent with the relative contraction in formal employment in regions facing larger tariff declines.

Note that these RAIS migration analyses can only capture migration events occurring for workers who are formally employed both before and after migrating. We supplement these results by examining changes in working-age population using the Census, which covers all individuals regardless of employment status.<sup>37</sup> Columns (1) and (2) in Table 7 counterintuitively find that population increased in harder-hit regions. However, this result disappears in all specifications that control for pre-liberalization trends in population growth. Column (3) controls for 1980-1991 population growth, while (4) controls for 1970-1980 population growth. Because the 1980-1991 pre-trend and the dependent variable both contain the 1991 log population, in columns (5) and (6) we instrument for the pre-trend using the 1980 population level and the 1970-1980 pre-trend, respectively. In all cases with pre-trend controls, the population response is insignificantly different from zero, and in columns (4)-(6), the point estimate is very small as well.

Thus, even though 11 percent of workers in the formal tradable sector in December 1989 are observed with formal employment in a different region in 2000 (see Table 5), their out-migration decisions are not influenced by local labor demand shocks. On the other hand, conditional on

> 37Note that we use a slightly aggregated region definition in Table 7. See Section 7 for details

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