IDEAS home Printed from
   My bibliography  Save this paper

How Large is the Impact of Trade on Inequality? A New Factor Content of Trade Approach


  • Rodrigo Adao

    (University of Chicago Booth School of Business)

  • Arnaud Costinot


  • Dave Donaldson


  • Dina Pomeranz

    (University of Zurich)

  • Paul Carrillo

    (George Washington University)


How are relative earnings across individuals (such as an economy’s collection of workers and firm owners) affected by openness to international trade? Extending the insights of Deardorff and Staiger (1988) to an arbitrary neoclassical economy, we develop a new theoretical framework for answering this question as a function of each individual’s factor content of trade and the economy’s factor demand system. We use a unique merged dataset (drawing on firm-to-firm transaction data, employer-employee matched data, owner-firm matched data, and firm-level customs transaction records) in order to measure the factor content of trade for each formal sector individual in Ecuador and to estimate the factor demand system for that country.

Suggested Citation

  • Rodrigo Adao & Arnaud Costinot & Dave Donaldson & Dina Pomeranz & Paul Carrillo, 2019. "How Large is the Impact of Trade on Inequality? A New Factor Content of Trade Approach," 2019 Meeting Papers 960, Society for Economic Dynamics.
  • Handle: RePEc:red:sed019:960

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed019:960. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.