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Quality Differentiation and the Labour Market Effects of International Trade

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  • Giuseppe Celi

    ()
    (CELPE University of Salerno, University of Bari)

  • Alasdair Smith

    ()
    (CELPE University of Salerno, University of Sussex)

Abstract

This paper offers a new treatment of the labour market effects of international trade, based on a model in which intra-industry trade is explained on Heckscher-Ohlin principles. The model is more consistent with stylised facts about North-South trade than the traditional Heckscher-Ohlin model of inter-industry trade. Applying the model to trade between Italy and ‘non-advanced countries’ and inferring the factor content of intra-industry trade from the inter-sectoral relationship between factor intensity and average unit values of exports, we find that the labour market effects of intra- industry trade add significantly to the estimated factor market impact of trade.

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Bibliographic Info

Paper provided by CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy in its series CELPE Discussion Papers with number 50.

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Date of creation: Jul 1999
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Handle: RePEc:sal:celpdp:50

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Related research

Keywords: intra-industry trade; North-South trade; vertical product differentiation; labour market effects of international trade;

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References

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  1. Fontagné, Lionel & Freudenberg, Michael & Péridy, Nicolas, 1998. "Intra-Industry Trade and the Single Market: Quality Matters," CEPR Discussion Papers 1959, C.E.P.R. Discussion Papers.
  2. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
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Cited by:
  1. Celi, Giuseppe, 2010. "Empirical Explanation of Vertical and Horizontal Intra-industry Trade in the UK: A Comment - Spiegazioni empiriche del commercio intra-industriale verticale ed orizzontale del Regno Unito: un commento," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 63(1), pages 53-90.

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