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Trade Liberalisation in a Heckscher–Ohlin Model: Does Public Skill Formation Change the Conventional Results?

Author

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  • PATRON, ROSSANA

    (University of Uruguay)

Abstract

Standard trade theory suggests that trade liberalisation produces opposite effects on human capital accumulation in developed and developing countries, reducing the incentives to invest in education in skill-scarce countries. Would conventional wisdom be modified if we introduce public provision of education in the standard framework? This paper shows that when skill formation depends on public provision, trade liberalisation effects on human capital accumulation depends on the education technology relative to the economic structure. In contrast to the previous literature, this framework explains skills convergence or divergence in a standard framework; thus, it may help to improve its predictive power.

Suggested Citation

  • Patron, Rossana, 2012. "Trade Liberalisation in a Heckscher–Ohlin Model: Does Public Skill Formation Change the Conventional Results?," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 47(1), pages 1-13.
    • Handle: RePEc:dse:indecr:0045
    as

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    More about this item

    Keywords

    Public Education; Trade Liberalisation; Heckscher–Ohlin;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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