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Skills Scarcity and Export Intensity

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  • Carlo Perroni
  • Davide Suverato

Abstract

We describe a model of trade with input based product differentiation and non-proportional trade costs that is capable of predicting a positive correlation between firms’ export intensity, the price of their exports, and the wages they pay to their workers. These correlations arise in the model solely from comparative input scarcity and independently of any productivity differentials: in equilibrium, firms that employ workers with comparatively scarcer skills, other things equal, export a larger proportion of their output, pay higher wages and charge higher prices.

Suggested Citation

  • Carlo Perroni & Davide Suverato, 2019. "Skills Scarcity and Export Intensity," CESifo Working Paper Series 7787, CESifo.
  • Handle: RePEc:ces:ceswps:_7787
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    More about this item

    Keywords

    export intensity and wages; input based product differentiation;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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