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Worker-Specific Effects of Globalisation

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  • Hartmut Egger
  • Udo Kreickemeier

Abstract

This paper sets up a general equilibrium model in which firms differ in their productivity, and workers have fairness preferences and hence provide full effort only if their wage is sufficiently high. With the wage considered fair by workers depending on the operating profits of the firm in which they are employed, more productive firms pay higher wages. We study trade between two symmetric countries. Exporters have higher operating profits, leading to an exporter wage premium. There are worker-specific effects of trade due to both the exporter wage premium and a reallocation of workers between firms.

Suggested Citation

  • Hartmut Egger & Udo Kreickemeier, "undated". "Worker-Specific Effects of Globalisation," Discussion Papers 09/23, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:09/23
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    File URL: http://www.nottingham.ac.uk/gep/documents/papers/2009/09-23.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Braun, Sebastian, 2011. "Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model," Labour Economics, Elsevier, vol. 18(1), pages 120-129, January.
    2. Achim Schmillen, 2016. "The Exporter Wage Premium Reconsidered—Destinations, Distances and Linked Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 531-546, May.
    3. Baumgarten, Daniel, 2013. "Exporters and the rise in wage inequality: Evidence from German linked employer–employee data," Journal of International Economics, Elsevier, vol. 90(1), pages 201-217.
    4. Lo Turco, Alessia & Maggioni, Daniela & Picchio, Matteo, 2013. "Offshoring and job stability: Evidence from Italian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 27-46.
    5. Araújo, Bruno César & Paz, Lourenço S., 2014. "The effects of exporting on wages: An evaluation using the 1999 Brazilian exchange rate devaluation," Journal of Development Economics, Elsevier, vol. 111(C), pages 1-16.
    6. repec:bla:worlde:v:40:y:2017:i:7:p:1473-1493 is not listed on IDEAS
    7. repec:bla:reviec:v:25:y:2017:i:3:p:447-475 is not listed on IDEAS

    More about this item

    Keywords

    Heterogeneous firms; Wage inequality; Fair wages; Involuntary unemployment;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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