We investigate the theoretical relationship between wage concentration and international market integration. Access to imported varieties lowers the cost of intermediate inputs (“machines”) used to carry out production tasks, causing workers with different comparative abilities to be sorted...

We describe a model of trade with input based product differentiation and non-proportional trade costs that is capable of predicting a positive correlation between firms' export intensity, the price of their exports, and the wages they pay to their workers. These correlations arise in the model...