Trade Liberalization and Intergenerational Occupational Mobility in Urban India

Reshad Ahsan () and Arpita Chatterjee

No 2015-23, Discussion Papers from School of Economics, The University of New South Wales

Abstract: In this paper, we make two novel contributions to the literature on trade and inequality. First, we show that the same mechanism that causes greater cross-sectional inequality, higher relative demand for skill, also facilitates intergenerational occupational mobility. In particular, we develop a stylized model that shows that the innovation induced by international trade causes an increase in the employment share of high-skill occupations. In turn, this allows an increasing number of sons to enter better occupations than their father. We then exploit spatial variation in exposure to trade liberalization in urban India to test our model’s prediction. Our empirical results confirm that sons that live in urban districts with a greater exposure to trade liberalization have a higher probability of being in a better occupation than their father. Further, as predicted by our model, we find that this positive impact of trade liberalization on intergenerational mobility is stronger in relatively technologically advanced districts. In a second contribution, we show that increased investment in education alone need not facilitate intergenerational occupational mobility. Instead, it only does so in urban districts where there has been a sufficient increase in the employment share of high-skill occupations.

Keywords: Trade and Labor Markets; Intergenerational Mobility (search for similar items in EconPapers)
JEL-codes: F14 F16 J62 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2015-10
New Economics Papers: this item is included in nep-int and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://research.economics.unsw.edu.au/RePEc/papers/2015-23.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable: Back-end server is at capacity

Related works:
Journal Article: Trade liberalization and intergenerational occupational mobility in urban India (2017)
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:swe:wpaper:2015-23

Access Statistics for this paper

More papers in Discussion Papers from School of Economics, The University of New South Wales Contact information at EDIRC.
Bibliographic data for series maintained by Hongyi Li ().