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International Trade and Inequality with Multiple Types of Labor and Capital

Author

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  • Ariel Burstein

    (UCLA)

Abstract

Inequality is shaped by complementarities between worker characteristics and the characteristics of technology, capital, firms, and industries. International trade affects the state of technology, the stocks of different types of capital, and the allocation of labor across firms and industries. We provide a quantitative framework featuring complementarities between labor characteristics and technology, capital, and goods characteristics in an environment with arbitrarily many types of labor, capital, and goods. The model is flexible enough to yield rich patterns of complementarities between labor, capital, and goods. We map the model to U.S. data and use it to perform a range of counterfactuals to study the role of changes in technology, capital, and international trade in accounting for the observed changes in income inequality at high levels of disaggregation.

Suggested Citation

  • Ariel Burstein, 2013. "International Trade and Inequality with Multiple Types of Labor and Capital," 2013 Meeting Papers 730, Society for Economic Dynamics.
    • Handle: RePEc:red:sed013:730
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