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Multi-dimensional skills and matching: implications for international trade and wage inequality

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  • Chihiro Inaba

Abstract

Workers have various kinds of skills and abilities in different amounts and proportions.The technology of firms in an industry is also characterized by a certain skill combination. The combinations of skills supplied by workers are often not the same as those demanded by firms---there can be mismatches between the skills supplied by workers and those demanded by firms. This kind of mismatches can cause both inter- and intra-industry wage inequalities. With two countries that have two industries and different skill distribution, international trade has a portion of the workers to move to a industry with a higher wage income than by remaining in the former industry. However, the moving workers who are matched with less appropriate firms may receive a lower wage income than in autarky.

Suggested Citation

  • Chihiro Inaba, 2019. "Multi-dimensional skills and matching: implications for international trade and wage inequality," Review of Economics and Institutions, Università di Perugia, vol. 10(2).
    • Handle: RePEc:pia:review:v:10:y:2019:i:2:n:2
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    References listed on IDEAS

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