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The Long and Short (of) Quality Ladders

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Author Info
Khandelwal, Amit

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Abstract

This paper offers evidence that a market's scope for quality differentiation, or its "quality ladder," can explain the heterogenous impact of low-wage competition on U.S. industry employment and output. I construct a market's quality ladders by first estimating countries' export quality to the U.S. using a procedure that exploits both price and quantity information, which contrasts to earlier work that relies only on price data. Markets differ in their estimated quality ladder lengths implying that the U.S. exhibits heterogeneity in its exposure to low-wage competition. Empirical estimates confirm that the impact of low-wage import penetration on U.S. manufacturing output and employment is weaker in markets characterized by longer quality ladders.

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File URL: http://mpra.ub.uni-muenchen.de/4496/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4496.

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Date of creation: Nov 2006
Date of revision: Aug 2008
Handle: RePEc:pra:mprapa:4496

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Related research
Keywords: Quality Ladders Low Wage Competition Quality Specialization Product Differentiation

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F1 - International Economics - - Trade

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Irene Brambilla & Amit Khandelwal & Peter Schott, 2007. "China's Experience Under the Multifiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Working Papers 13346, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Juan Carlos Hallak & Peter K. Schott, 2008. "Estimating Cross-Country Differences in Product Quality," NBER Working Papers 13807, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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