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Endogenous Labor Supply and International Trade

Author

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  • Tadashi Morita

    ()

  • Takanori Ago
  • Takatoshi Tabuchi
  • Kazuhiro Yamamoto

Abstract

It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.

Suggested Citation

  • Tadashi Morita & Takanori Ago & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2015. "Endogenous Labor Supply and International Trade," ERSA conference papers ersa15p853, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa15p853
    as

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    References listed on IDEAS

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    Cited by:

    1. AGO Takanori & MORITA Tadashi & TABUCHI Takatoshi & YAMAMOTO Kazuhiro, 2015. "Elastic Labor Supply and Agglomeration," Discussion papers 15118, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    international trade; variable markup; endogenous labor supply;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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