Endogenous Labor Supply and International Trade

Takanori Ago, Tadashi Morita (), Takatoshi Tabuchi and Kazuhiro Yamamoto

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.

Pages: 21 pages
Date: 2014-10
New Economics Papers: this item is included in nep-geo and nep-int
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Endogenous labor supply and international trade (2017)
Working Paper: Endogenous Labor Supply and International Trade (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:14062

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