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. We investigate the role of occupational mobility on the effects of trade...

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Main Authors:	Artuc, Erhan, McLaren, John
Format:	Journal Article
Language:	en_US
Published:	Elsevier 2015
Subjects:	sectoral mobility occupational mobility trade policy wage inequality
Online Access:	http://hdl.handle.net/10986/22717

id	okr-10986-22717
recordtype	oai_dc
spelling	okr-10986-227172021-04-23T14:04:10Z Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility Artuc, Erhan McLaren, John sectoral mobility occupational mobility trade policy wage inequality 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. We investigate 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 our specification can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. We also specify a novel model of offshoring based on task-by-task comparative advantage that collapses to a very simple form for simulation. We find that the costs of switching industry and occupation are both high, and of similar magnitude. In simulations we find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether or not she is harmed by a trade shock, but occupation is crucial in determining who is harmed by an offshoring shock. 2015-10-01T17:11:00Z 2015-10-01T17:11:00Z 2015-06-23 Journal Article Journal of International Economics 0022-1996 http://hdl.handle.net/10986/22717 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	sectoral mobility occupational mobility trade policy wage inequality
spellingShingle	sectoral mobility occupational mobility trade policy wage inequality Artuc, Erhan McLaren, John Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
description	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. We investigate 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 our specification can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. We also specify a novel model of offshoring based on task-by-task comparative advantage that collapses to a very simple form for simulation. We find that the costs of switching industry and occupation are both high, and of similar magnitude. In simulations we find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether or not she is harmed by a trade shock, but occupation is crucial in determining who is harmed by an offshoring shock.
format	Journal Article
author	Artuc, Erhan McLaren, John
author_facet	Artuc, Erhan McLaren, John
author_sort	Artuc, Erhan
title	Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
title_short	Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
title_full	Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
title_fullStr	Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
title_full_unstemmed	Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility
title_sort	trade policy and wage inequality : a structural analysis with occupational and sectoral mobility
publisher	Elsevier
publishDate	2015
url	http://hdl.handle.net/10986/22717
_version_	1764451924093960192

Trade Policy and Wage Inequality : A Structural Analysis with Occupational and Sectoral Mobility

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