Internal Geography, Labor Mobility, and the Distributional Impacts of Trade

2019 ◽  
Vol 11 (3) ◽  
pp. 252-288 ◽  
Author(s):  
Jingting Fan
Keyword(s):  
International Trade ◽  
Skill Premium ◽  
Domestic Economy ◽  
Spatial Equilibrium ◽  
Spatial Equilibrium Model ◽  
Unskilled Workers ◽  
And Migration ◽  
Migration Costs ◽  
Skilled And Unskilled Workers ◽  
Distributional Impacts

I develop a spatial-equilibrium model to quantify the distributional impacts of international trade in an economy with intranational trade and migration costs. Focusing on China, I find that international trade increases both between-region inequality among workers with similar skills and within-region inequality between skilled and unskilled workers, with the former accounting for 75 percent of the overall inequality increase. Ignoring spatial frictions will underestimate trade’s impact on the overall inequality and overestimate its impact on the aggregate skill premium. I further study how internal trade and Hukou reforms affect the domestic economy and the impacts of international trade. (JEL F14, F16, J24, O18, P23, P33, R12)

scholarly journals Importing Skill-Biased Technology

2013 ◽  
Vol 5 (2) ◽  
pp. 32-71 ◽  
Author(s):  
Ariel Burstein ◽  
Javier Cravino ◽  
Jonathan Vogel
Keyword(s):  
International Trade ◽  
Small Group ◽  
Skill Premium ◽  
Large Set ◽  
Real Wages ◽  
Large Share ◽  
Capital Equipment ◽  
Analytic Expressions ◽  
Unskilled Workers ◽  
Skilled And Unskilled Workers

The production of capital equipment is concentrated among a small group of countries, and many countries import a large share of their equipment. If capital-skill complementarity is an important feature of technology, international trade may have important effects on the skill premium through its impact on equipment accumulation. In this paper we propose a tractable framework for evaluating this effect, provide simple analytic expressions linking observable changes in import shares by sector to changes in real wages of skilled and unskilled workers (and, therefore, the skill premium), and quantify the importance of this effect for a large set of countries. (JEL E22, F11, F16, J24, L64)

scholarly journals Extending the Case for a Beneficial Brain Drain

2011 ◽  
Vol 231 (4) ◽  
Author(s):  
Simone Bertoli ◽  
Herbert Brücker
Keyword(s):  
Human Capital ◽  
Brain Drain ◽  
Returns To Education ◽  
Skill Premium ◽  
Immigration Policies ◽  
Level Of Education ◽  
Simulation Results ◽  
And Migration ◽  
Migration Costs ◽  
Parameter Values

SummarySeveral destination countries still adopt general immigration policies, and are characterized by lower returns to education than the countries of origin of the migrants. These two stylized facts challenge the literature on the beneficial brain drain which demonstrates that migration can increase the average human capital in the sending countries if immigration policies are selective, or the skill premium at destination is higher than at origin. We propose a model with empirically sensible assumptions on immigration policies and skill premia, where individuals face heterogeneous and correlated education and migration costs. The model is consistent with a robust stylized fact, namely that the rate of migration increases with schooling, and it shows that the average level of education of the stayers can be increasing in the probability to migrate even in such a setting. Our simulation results prove that these findings hold for reasonable parameter values. This extends the case for a beneficial brain drain in a further direction.

Supplier Substitutability and the Impacts of the 1980 U.S. Grain Embargo

1988 ◽  
Vol 20 (2) ◽  
pp. 1-14 ◽  
Author(s):  
Philip C. Abbott ◽  
Philip L. Paarlberg ◽  
Paul M. Patterson
Keyword(s):  
International Trade ◽  
Soviet Union ◽  
Equilibrium Model ◽  
Spatial Model ◽  
Spatial Equilibrium ◽  
Grain Markets ◽  
The Soviet Union ◽  
Spatial Equilibrium Model ◽  
Coarse Grains ◽  
Perfect Substitution

AbstractThe 1980 U.S. suspension of grain sales to the Soviet Union illustrates the importance of the choice of conceptual framework for empirical analysis of international trade problems. A spatial equilibrium model of wheat and coarse grains trade assumes perfect substitution among exporting nations' commoditites by importers and, thus, precludes the embargo from having a large impact. The imperfect substitutability assumption of an Armington model results in larger consequences from the embargo. For small shocks, the Armington model better captures the rigidities characteristic of international grain markets. The spatial model provides insights on adjustments to large shocks, but rigidities persist in actual markets.

scholarly journals Trade-Induced Structural Change and the Skill Premium

2019 ◽  
Vol 11 (3) ◽  
pp. 289-326 ◽  
Author(s):  
Javier Cravino ◽  
Sebastian Sotelo
Keyword(s):  
International Trade ◽  
Negative Impact ◽  
Real Income ◽  
Skill Premium ◽  
Relative Wage ◽  
Unskilled Labor ◽  
Manufacturing Employment ◽  
Goods And Services ◽  
Trade Model ◽  
Unskilled Workers

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. International trade also raises real income, which reduces manufacturing employment if services are more income elastic than manufactures. Manufacturing production is unskilled-labor-intensive, so that these changes increase the skill premium. We incorporate these mechanisms in a quantitative trade model and show that reductions in trade costs had a negative impact on manufacturing employment and the relative wage of unskilled workers. (JEL F16, J24, J31, L60)

Economic Growth and Foreign Workers in ASEAN and Singapore

2012 ◽  
Vol 11 (3) ◽  
pp. 114-136 ◽  
Author(s):  
Shandre Mugan Thangavelu
Keyword(s):  
Open Economy ◽  
Wage Gap ◽  
Small Open Economy ◽  
Output Growth ◽  
Foreign Workers ◽  
Domestic Economy ◽  
Unskilled Workers ◽  
Market Trends ◽  
State Growth ◽  
The Impact

This paper studies the trends of foreign immigrants in Asia and their effect on the growth of the Singapore economy. The paper also discusses the key labor market trends and the rationale for foreign workers in a small open economy like Singapore. Further, the paper highlights key simulations of the impact of foreign immigrants on output growth and wage gap for the Singapore economy by using Thangavelu's (2011) dynamic general equilibrium model. The study accounts for the flow of skilled and unskilled foreign workers on (a) steady-state growth; (b) the wage gap between the skilled and unskilled workers; and (c) innovation capabilities of the domestic economy. Further, the model also accounts for the contribution of immigrants on the welfare of the domestic economy through the immigration surplus that will accrue to the domestic economy.

How Voters Respond to Currency Crises: Evidence From Turkey

2021 ◽  
pp. 001041402110602
Author(s):  
David A. Steinberg
Keyword(s):  
International Trade ◽  
Public Opinion ◽  
Survey Data ◽  
Currency Crises ◽  
Political Attitudes ◽  
Economic Situation ◽  
Financial Shocks ◽  
The Government ◽  
Original Survey ◽  
And Migration

A burgeoning literature shows that international trade and migration shocks influence individuals’ political attitudes, but relatively little is known about how international financial shocks impact public opinion. This study examines how one prevalent type of international financial shock—currency crises—shapes mass political attitudes. I argue that currency crises reduce average citizens’ support for incumbent governments. I also expect voters’ concerns about their own pocketbooks to influence their response to currency crises. Original survey data from Turkey support these arguments. Exploiting exogenous variation in the currency’s value during the survey window, I show that currency depreciations strongly reduce support for the government. This effect is stronger among individuals that are more negatively affected by depreciation, and it is moderated by individuals’ perceptions of their personal economic situation. This evidence suggests that international financial shocks can strongly influence the opinions of average voters, and it provides further support for pocketbook theories.

scholarly journals Forest Product Trade Impacts of an Invasive Species: Modeling Structure and Intervention Trade-Offs

2006 ◽  
Vol 35 (1) ◽  
pp. 128-143 ◽  
Author(s):  
Jeffrey P. Prestemon ◽  
Shushuai Zhu ◽  
James A. Turner ◽  
Joseph Buongiorno ◽  
Ruhong Li
Keyword(s):  
Forest Products ◽  
The United States ◽  
Global Market ◽  
Forest Sector ◽  
Spatial Equilibrium ◽  
Trade Offs ◽  
Spatial Equilibrium Model ◽  
The World ◽  
Nun Moth ◽  
Market Consequences

Asian gypsy and nun moth introductions into the United States, possibly arriving on imported Siberian coniferous logs, threaten domestic forests and product markets and could have global market consequences. We simulate, using the Global Forest Products Model (a spatial equilibrium model of the world forest sector), the consequences under current policies of a widespread, successful pest invasion, and of plausible trading partner responses to the successful invasion. We find that trade liberalization would have a negligible effect on U.S. imports of Siberian logs and, consequently, on the risk of a pest invasion. But, if it happened, possibly through trade in other commodities, a successful and widespread pest invasion would have large effects on producers and consumers over the period 2002 to 2030.

Spatial equilibrium in deviations: An application to skill‐premium and skill‐mix heterogeneity

2018 ◽  
Vol 59 (4) ◽  
pp. 615-632
Author(s):  
Antonio Accetturo ◽  
Alberto Dalmazzo ◽  
Guido Blasio
Keyword(s):  
Skill Premium ◽  
Spatial Equilibrium ◽  
Skill Mix

scholarly journals Real Urban Wage in an Agricultural Economy Without Landless Farmers: Serbia 1862-1910

2020 ◽  
Author(s):  
Boško Mijatović ◽  
Branko Milanovic
Keyword(s):  
20Th Century ◽  
Economic Inequality ◽  
Early 20Th Century ◽  
Agricultural Economy ◽  
Modest Increase ◽  
Working Paper ◽  
Agricultural Societies ◽  
Unskilled Workers ◽  
Skilled And Unskilled Workers

The paper presents the first estimate of the welfare ratio for Serbia using the 19th and early 20th century data on wages of skilled and unskilled workers (including the part paid in kind) and prices of goods that enter into “subsistence” and “respectability” consumption baskets. It finds a stagnation of unskilled wage close to the welfare ratio of 1, and a modest increase in skilled wage. The paper introduces several adjustments to conventional methodology in order to make it more relevant for predominantly agricultural societies. (Stone Center on Socio-Economic Inequality Working Paper)

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