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Inequality and unemployment in a global economy

Helpman, Elhanan, Itshoki, Oleg and Redding, Stephen (2010) Inequality and unemployment in a global economy. Econometrica, 78 (4). pp. 1239-1283. ISSN 0012-9682

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Identification Number: 10.3982/ECTA8640


This paper develops a new framework for examining the determinants of wage distributions that emphasizes within-industry reallocation, labor market frictions, and differences in workforce composition across firms. More productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity. The opening of trade enhances wage inequality and can either raise or reduce unemployment. While wage inequality is higher in a trade equilibrium than in autarky, gradual trade liberalization first increases and later decreases inequality.

Item Type: Article
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Additional Information: © 2010 Wiley-Blackwell
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
Date Deposited: 08 Apr 2011 13:24
Last Modified: 18 Jun 2024 03:18

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