Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor...

We set up a two-country general equilibrium model, in which heterogeneous firms from one country (the source country) can offshore routine tasks to a low-wage host country. The most productive firms self-select into offshoring, and the impact on welfare in the source country can be positive or...

This paper is a dynamic extension of the well-known theory of trade in tasks. In my model, a firm's offshoring decision is governed by production cost savings, but also considers potential imitation risk. I show that such a consideration reduces the level of offshoring compared to a static...

This paper looks inside the firm and investigates how trade alters the matching of worker-specific abilities and task-specific requirements. The outcome of this matching depends on how firms organize their recruitment process and how much they invest into the screening of applicants. In the open...

In this paper we take a detailed look at the sectoral anatomy of regional growth in German regions over the period 1978-2008. In the aggregate, the German economy is characterized by a secular decline of the manufacturing sector and a rise of the modern service economy. This trend of structural...

This paper sets up a heterogeneous firms model, where production consists of a continuum of tasks that differ in complexity. Firms hire low-skilled and high-skilled workers to perform these tasks. How firms assign workers to tasks depends on factor prices for the two skill types and the...

What are the welfare and employment consequences of preferential trade agreements (PTAs) for developing and emerging countries? Standard quantitative models of international trade which are generally used to assess the impact of PTAs assume full employment and hence abstract from (net)...

We analyze the offshorability of jobs using the German Qualifications and Career Survey. The paper differentiates between outsourcing potential and international tradability and systematically uses a large set of potential determinants of organizational and spatial relocation derived from the...

Skill-Biased Technical Change is one of the most prominent explanations for the rise in wage inequality in the United States over the last decades. However, the explanation is challenged for several reasons. In this paper, I propose an alternative type of technical change, where new technologies...

In this article we study the relation between the quality of contract enforcement and R&D investment across countries and industries. If companies invest successfully in R&D they are open for exploitation by their supplier if supply contracts are not enforceable. This hold-up problem can reduce...