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Quality Differentiation and the Labour Market Effects of International Trade

Author

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  • Giuseppe Celi

    () (CELPE University of Salerno, University of Bari)

  • Alasdair Smith

    () (CELPE University of Salerno, University of Sussex)

Abstract

This paper offers a new treatment of the labour market effects of international trade, based on a model in which intra-industry trade is explained on Heckscher-Ohlin principles. The model is more consistent with stylised facts about North-South trade than the traditional Heckscher-Ohlin model of inter-industry trade. Applying the model to trade between Italy and ‘non-advanced countries’ and inferring the factor content of intra-industry trade from the inter-sectoral relationship between factor intensity and average unit values of exports, we find that the labour market effects of intra- industry trade add significantly to the estimated factor market impact of trade.

Suggested Citation

  • Giuseppe Celi & Alasdair Smith, 1999. "Quality Differentiation and the Labour Market Effects of International Trade," CELPE Discussion Papers 50, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  • Handle: RePEc:sal:celpdp:50
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    References listed on IDEAS

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    1. Fontagné, Lionel & Freudenberg, Michael & Péridy, Nicolas, 1998. "Intra-Industry Trade and the Single Market: Quality Matters," CEPR Discussion Papers 1959, C.E.P.R. Discussion Papers.
    2. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Celi, Giuseppe, 2010. "Empirical Explanation of Vertical and Horizontal Intra-industry Trade in the UK: A Comment - Spiegazioni empiriche del commercio intra-industriale verticale ed orizzontale del Regno Unito: un commento," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(1), pages 53-90.
    2. Gabrisch, Hubert, 2009. "Vertical Intra-Industry Trade, Technology and Income Distribution: A Panel Data Analysis of EU Trade with Central-East European Countries," MPRA Paper 64181, University Library of Munich, Germany.

    More about this item

    Keywords

    intra-industry trade; North-South trade; vertical product differentiation; labour market effects of international trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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