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The question of whether trade affects conflict is important for public policy. To date, theoretical studies have treated trade or the gains from trade as exogenous. However, a dyad's gains from trade are influenced by a number of factors, including foreign aid, tariffs, contiguity, and relative country size. This article presents a mathematical model to extend the conflict-trade model to incorporate foreign aid, tariffs, contiguity, and country size. In particular, we examine how the gains from trade are affected by these factors, with foreign aid, and contiguity increasing the gains from trade and tariffs reducing the gains from trade. Small countries have larger trade gains when trading with a large country than with a small country. If countries seek to protect their trade gains, the model predicts that foreign aid and contiguity will decrease conflict, while tariffs will increase conflict. The contiguity result suggests that conflict between neighboring countries would be greater than observed if not for the mitigating effects of trade. Trade with large countries decreases conflict more than trade with small countries. In addition, rather than concentrating solely on bilateral interactions, the models are specified in enough detail to garner implications concerning the effects of changes in the terms of trade on third parties. Empirical results, generally supporting the hypotheses, are presented using a sample from the Conflict and Peace Data Bank.

Many studies have examined the match between years of schooling and the schooling required for the job. The quantity of schooling is only one way to consider the match between schooling and jobs. This paper considers an alternative match between education and jobs based on the relationship between college majors and work activities. Twenty percent of workers report their work is not related to their degree field. Work-reported reasons for accepting such a position outside the field of study differ for men and women. The wage effects of mismatch vary considerably across the different reasons for accepting the position.

In this paper we expand the concept of educational mismatch to incorporate both the quantity and type of schooling into a measure of the distance between schooling and work. The wage effects increase as the distance between schooling and work increases, suggesting heterogeneity of both schooling and workers among the overeducated. The transferability of skills between college major and occupation, as well as the reason for accepting the position, is also examined. Copyright � 2008 The Author. Journal compilation � 2008 Blackwell Publishing Ltd and The University of Manchester.

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