Variety Trade and Skill Premium in a Calibrated General Equilibrium Model: The Case of Mexico

Manoj Atolia () and Yoshinori Kurokawa

MPRA Paper from University Library of Munich, Germany

Abstract: It can be theoretically shown that variety trade can be a possible source of increased skill premium in wages. No past studies, however, have empirically quantified how much of the increase in skill premium can be accounted for by the increase in variety trade. This paper now formulates a static general equilibrium model and then calibrates it to the Mexican input-output matrix for 1987. In the calibrated model, our numerical experiments show that the increase in U.S.-Mexican variety trade can explain approximately 12 percent of the actual increase in skill premium in Mexico from 1987 to 2000.

Keywords: Variety Trade; Skill Premium; Variety-Skill Complementarity; Calibrated General Equilibrium Model; Mexico (search for similar items in EconPapers)
JEL-codes: F12 F16 (search for similar items in EconPapers)
Date: 2008-10-29
New Economics Papers: this item is included in nep-cmp
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Related works:
Journal Article: The impact of trade margins on the skill premium: Evidence from Mexico (2016)
Working Paper: Variety Trade and Skill Premium in a Calibrated General Equilibrium Model: The Case of Mexico (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:13698

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