EconPapers    
Economics at your fingertips  
 

Inequality and International Trade: The Role of Skill-Biased Technology and Search Frictions

Moritz Ritter ()

No 1204, DETU Working Papers from Department of Economics, Temple University

Abstract: A competitive search model of the labor market is embedded into a small open economy with firm and worker heterogeneity. Search frictions generate equilibrium unemployment and income inequality between identical workers, in addition to income differences between skill groups. Numerical simulations of the model reveal that an increase in trade is likely to increase within-group inequality and decrease unemployment, while the effect on the skill premium is ambiguous. Overall the effect of trade on the labor market is minor if only a small fraction of the labor force is employed in exporting and import-competing industries.

Keywords: Directed Search; Inequality; International Trade (search for similar items in EconPapers)
JEL-codes: E25 F16 J64 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.cla.temple.edu/RePEc/documents/detu_2012_04.pdf First Version, 2012 (application/pdf)

Related works:
Journal Article: INEQUALITY AND INTERNATIONAL TRADE: THE ROLE OF SKILL-BIASED TECHNOLOGY AND SEARCH FRICTIONS (2017) Downloads
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:tem:wpaper:1204

Access Statistics for this paper

More papers in DETU Working Papers from Department of Economics, Temple University Contact information at EDIRC.
Bibliographic data for series maintained by Dimitrios Diamantaras ().

 
Page updated 2020-11-26
Handle: RePEc:tem:wpaper:1204