Human Capital Formation and International Trade

Bulent Unel ()

The B.E. Journal of Economic Analysis & Policy, 2015, vol. 15, issue 3, 1067-1092

Abstract: This paper develops a two-country, two-sector model of trade where the only difference between two countries is the cost of human capital formation. It is shown that this difference completely shapes the pattern of trade. Trade, in turn, affects the distribution of human capital both at extensive and at intensive margins, income distribution, and welfare in each country. Since not all agents gain from trade, the paper also investigates the conditions under which trade between two countries becomes possible if the final decision in each country is based on majority voting. Finally, the paper shows that lowering the cost of human capital in one country has asymmetric effects on human capital formation and the income inequality between skilled and unskilled workers across countries.

Keywords: human capital; income inequality; majority voting; trade (search for similar items in EconPapers)
JEL-codes: D7 F1 L1 O1 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://doi.org/10.1515/bejeap-2014-0041 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Human Capital Formation and International Trade (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:15:y:2015:i:3:p:1067-1092:n:5

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/bejeap-2014-0041

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().