Inequality in a global economy: evidence from Germany

Hesse, Gregor

Inequality in a global economy: evidence from Germany

Review of World Economics (Weltwirtschaftliches Archiv), 2015, vol. 151, issue 4, 803-820

Abstract: In the wake of the Melitz (Econometrica 71(6):1695–1725, 2003 ) model of heterogeneous firms in international trade, new theoretical models arose that try to assess the impact of trade on wage inequality within sectors, a feature that neoclassical trade theory cannot sufficiently explain. Based on the predictions of Helpman et al. (Econometrica 78(4):1239–1283, 2010 ), we use the LIAB, a German linked employer–employee panel dataset, in order to provide empirical evidence that wage inequality first increases and then decreases with gradual trade liberalization. Copyright Kiel Institute 2015

Keywords: Wage inequality; International trade; Linked employer-employee data; F12; F16; E24 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s10290-015-0225-x

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