Inequality and Unemployment in a Global Economy
This paper develops a new framework for examining the determinants of wage distributions that emphasizes within-industry reallocation, labor market frictions, and differences in workforce composition across firms. More productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity. The opening of trade enhances wage inequality and can either raise or reduce unemployment. While wage inequality is higher in a trade equilibrium than in autarky, gradual trade liberalization first increases and later decreases inequality. Copyright 2010 The Econometric Society.
Year of publication: |
2010
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Authors: | Helpman, Elhanan ; Itskhoki, Oleg ; Redding, Stephen |
Published in: |
Econometrica. - Econometric Society. - Vol. 78.2010, 4, p. 1239-1283
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Publisher: |
Econometric Society |
Saved in:
Online Resource
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