Trade policy and wage inequality: a structural analysis with occupational and sectoral mobility

Erhan Artuc and John McLaren

No 6194, Policy Research Working Paper Series from The World Bank

Abstract: A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade. This paper investigates the role of occupational mobility on the effects of trade shocks on wage inequality in a dynamic, structural econometric model of worker adjustment. Each worker in the model can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. The authors find that the costs of switching industry and occupation are both high, and of similar magnitude, but in simulations they find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether he or she is harmed by a trade shock.

Keywords: Labor Markets; Labor Policies; Economic Theory&Research; Housing&Human Habitats; Work&Working Conditions (search for similar items in EconPapers)
Date: 2012-09-01
New Economics Papers: this item is included in nep-int, nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Trade policy and wage inequality: A structural analysis with occupational and sectoral mobility (2015)
Working Paper: Trade Policy and Wage Inequality: A Structural Analysis with Occupational and Sectoral Mobility (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:6194

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