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Globalization, the Jobs Ladder and Economic Mobility

Author

Listed:
  • Davidson, Carl

    (Department of Economics)

  • Heyman, Fredrik

    (Research Institute of Industrial Economics (IFN))

  • Matusz, Steven

    (Department of Economics)

  • Sjöholm, Fredrik

    (Department of Economics, Lund University)

  • Chun Zhu, Susan

    (Department of Economics)

Abstract

Globalization affects the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and workers differ in skills, and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. We calibrate the model using many of the same parameters and targeting the same moments of the US economy as Melitz and Redding (2015) and then investigate the impact of globalization. Our results indicate that although falling trade costs results in greater wage inequality, it also leads to a wider path up the jobs ladder and less time spent in entry level jobs.

Suggested Citation

  • Davidson, Carl & Heyman, Fredrik & Matusz, Steven & Sjöholm, Fredrik & Chun Zhu, Susan, 2018. "Globalization, the Jobs Ladder and Economic Mobility," Working Paper Series 1249, Research Institute of Industrial Economics, revised 21 Feb 2020.
  • Handle: RePEc:hhs:iuiwop:1249
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Job Ladders; Globalization; Wages; Inequality; Export;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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