Entrepreneurs, jobs, and trade

Managerial capital, occupational choice and inequality in a global economy

“…Why does trade liberalization improve welfare even when it leads to more unemployment? A possible answer stems from comparing the results of the present model to those in Dinopoulos and Unel (2015), where the presence of aggregate unemployment may lead to welfare loss. The key difference is that Dinopoulos and Unel (2015) assume perfectly competitive product markets, whereas here one sector exhibits horizontal product differentiation.…”

“…Thomas Piketty and his collabourators have documented the growth of top‐income and wealth inequality in many advanced and developing countries (Piketty , Piketty and Saez ). A growing literature has proposed a variety of explanations for this alarming development, highlighting the role of capital accumulation (Piketty ), institutions (Acemoglu and Robinson ), technological progress (Jones ) and inter‐industry trade (Dinopoulos and Unel ). The present paper complements this literature by focusing on the roles of intra‐industry trade and job‐creating policies in shaping top‐income inequality.…”

“…15 In other words, our model highlights supply-based (occupational-choice) channels transmitting the impact of trade liberalization on aggregate unemployment, whereas their model focuses on a demand-based mechanism. The latter is present in Dinopoulos and Unel (2015), who focus on inter-industry trade triggered by differences in relative prices in a global economy with asymmetric countries.…”

“…As worker supply is also fixed, it follows that changes in trade costs ¿ and f x do not affect the unemployment rate. 15 InDinopoulos and Unel (2015), trade affects unemployment through a supply and a demand channel. The latter channel is reestablished in a global economy consisting of two asymmetric countries where terms-of-trade changes alter aggregate expenditure and lead to sectoral worker shifts.…”

A model of occupational choice, offshoring and immigration

“… This paper also complements the literature that incorporates occupational choice into trade models. See, for example, Monte (), Egger and Kreichenmeir (), Dinopoulos and Unel (), and Unel (), among many others. …”