Occupational Choice, Aggregate Productivity, and Trade

Meckl, Jürgen; Weigert, Benjamin

doi:10.1111/rode.12049

Cited by 5 publications

(4 citation statements)

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“…There are two ways out of this problem, either assume a search‐theoretic labor market or endogenize the decision to invest in human capital in order to explain the distribution of worker abilities. For such an approach, see Meckl and Weigert (). Finally, even if trade liberalization is welfare‐enhancing for the economy as a whole, there will always be some losers.…”

Section: Discussionmentioning

confidence: 99%

International Trade and Unemployment—the Worker‐selection Effect

Pinto

Michaelis

2014

Rev International Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper analyzes how trade liberalization in ‡uences the unemployment rate of workers with di¤erent abilities. We re…ne the Melitz (2003) framework to account for trade unions and heterogeneous workers, who di¤er with respect to their abilities. Our main …ndings are: (i) highability workers pro…t from trade liberalization in terms of higher wages and higher employment; (ii) the least e¢ cient workers loose their job and switch to long-term unemployment (worker-selection e¤ect); (iii) if a country is endowed with a large fraction of low-skilled workers, trade liberalization leads to a rise in aggregate unemployment. In this case, trade liberalization may harm a country's welfare. JEL-Classi…cation: F1, F16, J5 Terms of use: Documents in

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Section: Discussionmentioning

confidence: 99%

International Trade and Unemployment—the Worker‐selection Effect

Pinto

Michaelis

2014

Rev International Economics

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“…Efforts to merge the occupational choice models with the trade models are rare. Monte (2011) and Meckl and Weigert (2011) developed models similar to the one presented here. Their models are used to study wage distributions and the origin of firm productivity.…”

Section: Introductionmentioning

confidence: 99%

Globalization and top income shares

Ruzic

2020

Journal of International Economics

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How does globalization affect the income gaps between the rich and the poor? This paper presents a new piece of empirical evidence showing that access to the global market, either through exporting or through multinational production, is associated with a higher executive-toworker pay ratio within the firm. It then builds a model with heterogeneous firms, occupational choice, and executive compensation to model analytically and assess quantitatively the impact of globalization on the income gaps between the rich and the poor. The key mechanism is that the "gains from trade" are not distributed evenly within the same firm. The compensation of an executive is positively linked to the size of the firm, while the wage paid to the workers is determined in a country-wide labor market. Any extra profit earned in the foreign markets benefits the executives more than the average worker. Counterfactual exercises suggest that this new channel is quantitatively important for the observed surge in top income shares in the data. Using the changes in the volume of trade and multinational firm sales, the model can explain around 33percent of the surge in top income shares over the past two decades in the United States.Keyword: E25 F12 F62 J33 for their support and advice. I am also grateful to William Lincoln for his help at various stages of this paper, to Clint Carter for the help with the census data and disclosure process, to Brian Withka for the help with the Capital IQ data, and to seminar participants at the University of Michigan and the Midwest International Trade Meetings for helpful comments. I also thank Rackham Graduate School and the MITRE Grant at University of Michigan for financial support. Any opinions and conclusions expressed herein are those of the author and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed.

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“…Also seeBaldwin and Robert-Nicoud (2004) andMeckl and Weigert (2011) for the definition of average industry productivity.…”

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confidence: 99%

Comparative Advantage, Outward Foreign Direct Investment and Average Industry Productivity: Theory and Evidence

Hyun

Jang

2012

SSRN Journal

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This paper analyzes the role of comparative advantage in the effects of outward FDI on domestic productivity. In the theoretical framework, we place Helpman, Melitz and Yeaple's (2004) outward FDI model into Bernard, Redding andSchott's (2007) framework of international trade with heterogeneous monopolistically competitive firms and comparative advantage and show that the increase in outward FDI raises aggregate productivity in all industries through the intra-sectoral reallocation of firms, but this productivity growth is more prominent in a nation's comparative advantage industry. Using Korean industry-level data, we empirically test our theoretical predictions using the production function model as a benchmark model, followed by system GMM estimation methods for sensitivity analysis. Our empirical findings also suggest that outward FDI has a positive effect on domestic productivity and this link is more likely to take place in those sectors above average competitiveness measured as export-based revealed comparative advantage.

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Occupational Choice, Aggregate Productivity, and Trade

Cited by 5 publications

References 22 publications

International Trade and Unemployment—the Worker‐selection Effect

International Trade and Unemployment—the Worker‐selection Effect

Globalization and top income shares

Comparative Advantage, Outward Foreign Direct Investment and Average Industry Productivity: Theory and Evidence

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