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Heterogeneous workers and international trade

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  • Gene Grossman

Abstract

In this paper, I survey the recent theoretical literature that incorporates heterogeneous labor into models of international trade. The models with heterogeneous labor have been used to study how talent dispersion can be a source of comparative advantage, how the opening of trade affects the full distribution of wages, and how trade affects industry productivity and efficiency via its impact on sorting and matching in the labor market. Some of the most recent contributions also introduce labor market frictions to study the effects of trade on structural unemployment and on mismatch between workers and firms. Copyright Kiel Institute 2013

Suggested Citation

  • Gene Grossman, 2013. "Heterogeneous workers and international trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 211-245, June.
    • Handle: RePEc:spr:weltar:v:149:y:2013:i:2:p:211-245
    DOI: 10.1007/s10290-013-0152-7
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    Cited by:

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    2. Elhanan Helpman, 2016. "Globalization and Wage Inequality," NBER Working Papers 22944, National Bureau of Economic Research, Inc.
    3. Jaerim Choi, 2021. "Two-sided heterogeneity, endogenous sharing, and international matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(2), pages 473-509, September.
    4. Sarah Guillou & Tania Treibich, 2019. "Firm export diversification and change in workforce composition," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(4), pages 645-676, November.
    5. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    6. Carsten Eckel & Stephen R. Yeaple, 2023. "Inefficient Labor Market Sorting," Rationality and Competition Discussion Paper Series 437, CRC TRR 190 Rationality and Competition.
    7. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2015. "Integrated sectors - diversified earnings: the (missing) impact of offshoring on wages and wage convergence in the EU27," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(3), pages 325-350, September.
    8. Nicola Gagliardi & Benoît Mahy & François Rycx, 2020. "Trade, GVCs, and wage inequality: Theoretical and empirical insights," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 115-134.
    9. Taiji Furusawa & Hideo Konishi & Duong Lam Anh Tran, 2020. "International Trade and Income Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 993-1026, July.
    10. Goel, Manisha, 2017. "Inequality Between and Within Skill Groups: The Curious Case of India," World Development, Elsevier, vol. 93(C), pages 153-176.
    11. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    12. Catherine Laffineur & El Mouhoud, 2015. "The jobs at risk from globalization: the French case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 477-531, August.
    13. Daniel Baumgarten, 2015. "International trade and worker flows: empirical evidence for Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 589-608, August.
    14. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2018. "The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 129-163, February.
    15. Eckel, Carsten & Yeaple, Stephen R., 2024. "Inefficient labor market sorting," Journal of Economic Theory, Elsevier, vol. 221(C).
    16. Marco Pinto & Jochen Michaelis, 2014. "International Trade and Unemployment—the Worker-selection Effect," Review of International Economics, Wiley Blackwell, vol. 22(2), pages 226-252, May.
    17. Eckel, Carsten & Yeaple, Stephen, 2023. "Inefficient Labor Market Sorting," CEPR Discussion Papers 18552, C.E.P.R. Discussion Papers.
    18. Hongshik Lee & Joonhyung Lee, 2015. "The impact of offshoring on temporary workers: evidence on wages from South Korea," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 555-587, August.
    19. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2017. "Workers, Firms and Task Heterogeneity in International Trade Analysis: An Example of Wage Effects of Trade Within GVC," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(2), pages 9-25.
    20. Juan A. Correa & Francisco Parro, 2020. "On the heterogeneous short‐term effects of minimum wages on labor demand," International Journal of Economic Theory, The International Society for Economic Theory, vol. 16(2), pages 184-195, June.
    21. Giovannetti, Giorgia & Ricchiuti, Giorgio & Velucchi, Margherita, 2017. "Size and technology: The Odd Couple for affiliates survival," Structural Change and Economic Dynamics, Elsevier, vol. 40(C), pages 64-71.
    22. Richard Friberg & Mark Sanctuary, 2020. "Exchange rate risk and the skill composition of labor," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 287-312, May.

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    More about this item

    Keywords

    Heterogeneous labor; Matching; Sorting; Productivity; Wage distribution; International trade; F11; F16;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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