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Skill Acquisition, Credit Constraints, and Trade

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  • Tatyana Chesnokova
  • Kala Krishna

Abstract

This paper looks at the effect of credit constraints on skill acquisition when agents have heterogeneous abilities and wealth. We use a two factor general equilibrium model and assume credit markets are absent. We explore the effects of trade on factor earnings as well as the evolution of the distribution of income in small and large economies. Our work suggests that developed countries need to ensure access to education when liberalizing trade to ensure they reap the potential gains from trade.

Suggested Citation

  • Tatyana Chesnokova & Kala Krishna, 2006. "Skill Acquisition, Credit Constraints, and Trade," NBER Working Papers 12411, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:12411
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    References listed on IDEAS

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    1. Stephen V. Cameron & James J. Heckman, 1998. "Life Cycle Schooling and Dynamic Selection Bias: Models and Evidence for Five Cohorts of American Males," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 262-333, April.
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    6. Flug, Karnit & Spilimbergo, Antonio & Wachtenheim, Erik, 1998. "Investment in education: do economic volatility and credit constraints matter?," Journal of Development Economics, Elsevier, vol. 55(2), pages 465-481, April.
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    Cited by:

    1. Alexander Monge-Naranjo, 2012. "Foreign firms and the diffusion of knowledge," Working Papers 2012-055, Federal Reserve Bank of St. Louis.
    2. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    3. Roberto Bonfatti & Maitreesh Ghatak, 2010. "Trade and the Skill Premium Puzzle with Capital Market Imperfections," STICERD - Economic Organisation and Public Policy Discussion Papers Series 020, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Monge-Naranjo, Alexander, 2016. "Openness and the Optimal Taxation of Foreign Know-How," Working Papers 2016-20, Federal Reserve Bank of St. Louis.
    5. Pfeiffer, Friedhelm & Reuß, Karsten, 2008. "Age-dependent skill formation and returns to education," Labour Economics, Elsevier, vol. 15(4), pages 631-646, August.
    6. Bonfatti, Roberto & Ghatak, Maitreesh, 2013. "Trade and the allocation of talent with capital market imperfections," Journal of International Economics, Elsevier, vol. 89(1), pages 187-201.
    7. repec:eee:inecon:v:109:y:2017:i:c:p:102-115 is not listed on IDEAS
    8. Arpita Chatterjee, 2014. "Endogenous Comparative Advantage, Gains From Trade and Symmetry-Breaking," Discussion Papers 2014-18, School of Economics, The University of New South Wales.
    9. Alexander Monge-Naranjo, 2012. "Knowledge Spillovers and The Optimal Taxation of Multinational Firms," 2012 Meeting Papers 593, Society for Economic Dynamics.
    10. Monge-Naranjo, Alexander, 2016. "Markets, Externalities, and the Dynamic Gains of Openness," Working Papers 2016-23, Federal Reserve Bank of St. Louis, revised 01 Nov 2016.

    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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