Trade liberalization in a Heckscher–Ohlin model: Does public skill formation change the conventional results?

Rossana Patrón
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Rossana Patrón: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República

No 1809, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: Standard trade theory suggests that trade liberalization produces opposite effects on human capital accumulation in developed and developing countries, reducing the incentives to invest in education in skill-scarce countries. How would conventional wisdom be modified if we introduce public provision of education in the standard framework? This paper develops a simple model for this purpose, showing that when skills formation depends on public provision of education, trade liberalization affects the human capital accumulation process depending on the economic structure; thus, in contrast to the previous literature, this framework explains convergence or divergence in the accumulation of skills between trading countries.

Keywords: public education; trade liberalization; Heckscher–Ohlin (search for similar items in EconPapers)
JEL-codes: F11 I20 O15 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2009-09
New Economics Papers: this item is included in nep-edu and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:1809

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