Human Capital Formation and International Trade
This paper develops a two-country, two-sector model of trade where the only difference between two countries is the cost of human capital formation. It is shown that this difference completely shapes the pattern of trade. Trade, in turn, affects the distribution of human capital both at extensive and intensive margins. Furthermore, cross-country differences in the costs of human capital formation determine the effects of trade on income distribution and welfare in each country. The paper also shows that lowering the cost of human capital acquisition in one country affects human capital formation, income distribution, and welfare asymmetrically in two countries.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: Baton Rouge, LA 70803-6306|
Web page: http://www.business.lsu.edu/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Galor, Oded & Mountford, Andrew, 2008.
"Trading Population for Productivity: Theory and Evidence,"
CEPR Discussion Papers
6678, C.E.P.R. Discussion Papers.
- Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1143-1179.
- Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Working Papers 2008-2, Brown University, Department of Economics.
- Bond, Eric W., 1986. "Entrepreneurial ability, income distribution, and international trade," Journal of International Economics, Elsevier, vol. 20(3-4), pages 343-356, May.
- Francisco J. Buera & Joseph Kaboski & Yongseok Shin, 2009.
"Finance and Development: A Tale of Two Sectors,"
NBER Working Papers
14914, National Bureau of Economic Research, Inc.
- Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
- Spiros Bougheas & Raymond Riezman, 2013.
"Trade and the distribution of human capital,"
World Scientific Book Chapters,
in: International Trade Agreements and Political Economy, chapter 20, pages 395-407
World Scientific Publishing Co. Pte. Ltd..
- Kevin O’rourke & Jeffrey Williamson, 2005. "From Malthus to Ohlin: Trade, Industrialisation and Distribution Since 1500," Journal of Economic Growth, Springer, vol. 10(1), pages 5-34, 01.
- Jota Ishikawa, 1996. "Scale Economies in Factor Supplies: International Trade, and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 573-94, August.
- Borsook, I., 1987. "Earnings, ability and international trade," Journal of International Economics, Elsevier, vol. 22(3-4), pages 281-295, May.
When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2013-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.