Labor Markets and Kaleidoscopic Comparative Advantage
AbstractThis paper addresses the labor market implications of an increase in openness and foreign competition. It develops a model where industry-specific productivity shocks create uncertainty, producing an environment of kaleidoscopic comparative advantage (Bhagwati, 1998). The key assumption is that risk markets are imperfect, as wage-contracts are subject to uninsurable bankruptcy risk. In this context, the paper analyzes the consequences for wage levels, wage volatility, job-instability and income distribution, of the openness of previously non-traded industries to the forces of international trade and foreign competition.
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Bibliographic InfoPaper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200004.
Date of creation: 2000
Date of revision:
Other versions of this item:
- Daniel A. Traca, 2005. "Labor Markets and Kaleidoscopic Comparative Advantage," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 431-444, 08.
- Daniel Traca, 2005. "Labor markets and kaleidoscopic comparative advantage," ULB Institutional Repository 2013/9223, ULB -- Universite Libre de Bruxelles.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
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- Don J. Webber & Michael Horswell, 2009. "Winners and Losers: Spatial variations in labour productivity in England and Wales," Working Papers 0912, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
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