Nothing Special   »   [go: up one dir, main page]

  EconPapers    
Economics at your fingertips  
 

Trade and Inequality in a Directed Search Model with Firm and Worker Heterogeneity

Moritz Ritter

No 1202, DETU Working Papers from Department of Economics, Temple University

Abstract: This paper integrates the insight that exporting firms are typically more productive and employ higher skilled workers into a directed search model of the labor market. The model generates a skill premium as well as residual wage inequality among identical workers. A trade liberalization will cause a reallocation of workers both within and across industries. The within industry reallocation increases the skill premium, increases residual inequality for low-skilled workers, and decreases residual inequality for high-skilled workers. The across industry reallocation induces the well-known Stolper-Samuleson effect. The calibrated model generates results consistent with the prior literature examining the effect of the Canada-U.S. Free Trade Agreement on the Canadian labor market: a signiï¬ cant decrease in employment in manufacturing, but only a small change in wages.

Keywords: Directed Search; Inequality; International Trade (search for similar items in EconPapers)
JEL-codes: E25 F16 J64 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.cla.temple.edu/RePEc/documents/detu_2012_02.pdf First Version, 2012 (application/pdf)

Related works:
Journal Article: Trade and inequality in a directed search model with firm and worker heterogeneity (2015) Downloads
Journal Article: Trade and inequality in a directed search model with firm and worker heterogeneity (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tem:wpaper:1202

Access Statistics for this paper

More papers in DETU Working Papers from Department of Economics, Temple University Contact information at EDIRC.
Bibliographic data for series maintained by Dimitrios Diamantaras ().

 
Page updated 2024-11-26
Handle: RePEc:tem:wpaper:1202