Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade

Simon Galle, Andres Rodriguez-Clare and Moises Yi

No 23737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a multi-sector gravity model with heterogeneous workers to quantify the aggregate and group-level welfare effects of trade. We estimate the model using the structural relationship between China-shock driven changes in manufacturing employment and average earnings across US groups defined by commuting zone and education. We find that the China shock increases average welfare but some groups experience losses as high as five times the average gain. Adjusted for plausible measures of inequality aversion, gains in social welfare are positive and only slightly lower than with the standard aggregation.

JEL-codes: F1 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-cna and nep-int
Note: ITI
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Citations: View citations in EconPapers (108)

Published as Simon Galle & Andrés Rodríguez-Clare & Moises Yi, 2023. "Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade," The Review of Economic Studies, vol 90(1), pages 331-375.

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Journal Article: Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade (2023)
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