We study, both theoretically and empirically, how trade imbalances affect the structure of countries exports and wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill...

Trade and technological change continually alter the workplace and labor-market outcomes, with consequences for economy-wide welfare and the distribution of real incomes. This report assesses the state of economic research into those areas, with a particular focus on empirical methodologies and...

Previous study by Card and Lewis (2005) has found (puzzling) that inflows of Mexican immigrants into new metropolitan areas have had no effect on the relative wages of very low-skill (high school dropouts). Rather, Mexican workers do affect relative wages for high school graduates. Whereas Card...

Standard search models are inconsistent with the amount of frictional wage dis- persion found in U.S. data. We resolve this apparent puzzle by modeling skill development (learning by doing on the job, skill loss during unemployment) and duration dependence in unemployment benefits in a random on...

This paper compares trends in wage inequality in the U.S. and Germany using an approach developed by MaCurdy and Mroz (1995) to separate age, time, and cohort effects. Between 1979 and 2004, wage inequality increased strongly in both the U.S. and Germany but there were various country specific...