Inequality and Unemployment in a Global Economy

Elhanan Helpman, Oleg Itskhoki and Stephen Redding

Scholarly Articles from Harvard University Department of Economics

Abstract: This paper develops a new framework for examining the determinants of wage distributions that emphasizes within-industry reallocation, labor market frictions, and differences in workforce composition across firms. More productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity. The opening of trade enhances wage inequality and can either raise or reduce unemployment. While wage inequality is higher in a trade equilibrium than in autarky, gradual trade liberalization first increases and later decreases inequality.

Date: 2010
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Citations: View citations in EconPapers (766)

Published in Econometrica

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http://dash.harvard.edu/bitstream/handle/1/2558665 ... 910_final%20DASH.pdf (application/pdf)
http://dash.harvard.edu/bitstream/handle/1/2558665 ... and_Unemployment.pdf (application/pdf)

Related works:
Journal Article: Inequality and Unemployment in a Global Economy (2010)
Working Paper: Inequality and Unemployment in a Global Economy (2009)
Working Paper: Inequality and Unemployment in a Global Economy (2009)
Working Paper: Inequality and unemployment in a global economy (2009)
Working Paper: Inequality and Unemployment in a Global Economy (2008)
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