We study the impact on the skill premium of increases in the quality of goods consumed by households (“trading up …”). Our empirical work shows that high- quality goods are more intensive in skilled labor than low-quality goods and that … household spending on high-quality goods rises with income. We propose a model consistent with these facts. This model accounts …

We study the impact on the skill premium of increases in the quality of goods consumed by households ("trading up …"). Our empirical work shows that high- quality goods are more intensive in skilled labor than low-quality goods and that … household spending on high-quality goods rises with income. We propose a model consistent with these facts. This model accounts …

In a two-cone Heckscher-Ohlin model with CES preferences and a continuum of goods, adding new goods to the North …'s technology necessarily increases the Northern skill premium if the new goods are skilled-labor intensive, but may even increase … the premium if they are unskilled-labor intensive. Thus, the introduction of new goods into US technology could have done …