Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade. This paper investiga...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16711727/trade-policy-wage-inequality-structural-analysis-occupational-sectoral-mobility http://hdl.handle.net/10986/12033 |
| Summary: | A number of authors have argued that a
worker's occupation of employment is at least as
important as the worker's industry of employment in
determining whether the worker will be hurt or helped by
international trade. This paper investigates the role of
occupational mobility on the effects of trade shocks on wage
inequality in a dynamic, structural econometric model of
worker adjustment. Each worker in the model can switch
either industry, occupation, or both, paying a time-varying
cost to do so in a rational-expectations optimizing
environment. The authors find that the costs of switching
industry and occupation are both high, and of similar
magnitude, but in simulations they find that a worker's
industry of employment is much more important than either
the worker's occupation or skill class in determining
whether he or she is harmed by a trade shock. |
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