scholarly journals Trade-Induced Structural Change and the Skill Premium

2019 ◽  
Vol 11 (3) ◽  
pp. 289-326 ◽  
Author(s):  
Javier Cravino ◽  
Sebastian Sotelo
Keyword(s):  
International Trade ◽  
Negative Impact ◽  
Real Income ◽  
Skill Premium ◽  
Relative Wage ◽  
Unskilled Labor ◽  
Manufacturing Employment ◽  
Goods And Services ◽  
Trade Model ◽  
Unskilled Workers

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. International trade also raises real income, which reduces manufacturing employment if services are more income elastic than manufactures. Manufacturing production is unskilled-labor-intensive, so that these changes increase the skill premium. We incorporate these mechanisms in a quantitative trade model and show that reductions in trade costs had a negative impact on manufacturing employment and the relative wage of unskilled workers. (JEL F16, J24, J31, L60)

scholarly journals CARTELS AND THEIR ROLE IN THE ORGANIZATION OF PRODUCTION AND INTERNATIONAL TRADE

2020 ◽  
pp. 71-77
Author(s):  
Елена Вячеславовна Зенкина ◽  
Валерий Максимович Тумин ◽  
Пётр Александрович Костромин
Keyword(s):  
International Trade ◽  
Negative Impact ◽  
Positive Impact ◽  
Modern World ◽  
Goods And Services ◽  
History Of ◽  
International Cartel ◽  
Organization Of Production ◽  
Market Relations ◽  
Domestic Companies

In the modern world economy, an extremely important role is played by large international holding-type companies, often referred to as transnational corporations, financial, financial-industrial and other groups. The enterprises of such companies are located and operate in most countries of the world and have a significant impact on the main parameters of the functioning of a wide variety of markets for goods and services. With their economic potential, which often exceeds the corresponding potential of individual states, these companies are able to influence the development of market relations in both positive and negative directions. The so-called international cartel agreements, which generally mean mutual agreements between companies that often contradict the current legislation of countries, in order to establish a monopoly on certain goods (services) produced, control and capture markets, have a particularly acute negative impact on markets. In this regard, the article presents a brief history of the activities of international cartels and law enforcement practice to restrict their activities. The forms and key provisions of cartel collusion of enterprises of various industry orientations and spheres of activity are characterized. Some compensation schemes and forms of punishment for suppressing fraudulent actions of cartel participants are outlined. At the same time, there are shown situations when cartel agreements have a positive impact on the development of production, international trade and market relations. Despite strict antitrust laws, international cartels are created and operate in the markets, which should be taken into account by domestic companies when planning the results of work for them 

Capital-Skill Complementarity and the Skill Premium in a Quantitative Model of Trade

2013 ◽  
Vol 5 (2) ◽  
pp. 72-117 ◽  
Author(s):  
Fernando Parro
Keyword(s):  
Technical Change ◽  
Quantitative Model ◽  
Trade Costs ◽  
Relative Price ◽  
Skill Premium ◽  
Unskilled Labor ◽  
Capital Goods ◽  
Trade Model ◽  
Skilled And Unskilled Labor ◽  
The Impact

Technological change has reduced the relative price of capital goods. Reductions in trade costs make it cheaper to import capital goods. With capital-skill complementarity, both can increase the skill premium. I construct a general-equilibrium trade model with capital-skill complementarity to study the impact of changing worldwide trade costs and technologies on the skill premium. The impacts of trade costs and technical change are comparable, especially in developing countries, and much larger than Stolper-Samuelson effects. I find that both skilled and unskilled labor gain from trade, and that larger gains from trade are associated with larger increases in the skill premium. (JEL E22, F11, F16, J24, O33)

scholarly journals IMPLEMENTATION OF NON-DISCRIMINATION IN RESPECT TO DETERMINE THE APPROPRIATE POLICY FOR DEALING WITH INTERNATIONAL TRADE

2020 ◽  
Author(s):  
Dijan Widijowati
Keyword(s):  
International Trade ◽  
Negative Impact ◽  
Secondary Data ◽  
Literature Study ◽  
Cultural Rights ◽  
Goods And Services ◽  
Analytical Assessment ◽  
Legal Policies ◽  
The Government ◽  
National Borders

International trade is an activity involving the exchange of goods and services across national borders. International trade is strongly influenced by the harmonization of political, legal, social and cultural rights owned by respective countries. A number of principles have been formulated and enforced to prevent and resolve disputes arising from international trade, one of which is the principle of non- discrimination. In practice the existence of the principle of non-discrimination often cannot be implemented, because it runs contrary to the policies of each country which is to protect its own interests. Based on the background of the problem that has been described, three subject matters were identified: 1. How can the principle of non-discrimination be applied in international trade? 2. How can appropriate legal policies in dealing with the negative impact of international trade be determined? 3. How can expected disputes on international trade be resolved? The method used in this study was the normative juridical approach to literature. Studies have properties that descriptive analytical assessment phase which focuses on the assessment of secondary data. Data was collected by means of a literature study to support the object of assessment. The results of the assessment conducted revealed that the principle of non-discrimination in international trade cannot be directly applied. Although there is a variety of policies whether committed by the government or society which indirectly consider the principle of non-discrimination internationally, the principle of non-discrimination can only be applied if it can support and protect the interests of concerned parties.

DIRECTED STRUCTURAL CHANGE

2017 ◽  
Vol 23 (5) ◽  
pp. 1921-1958
Author(s):  
Robert F. Kane
Keyword(s):  
Structural Change ◽  
Technical Progress ◽  
Technical Change ◽  
Relative Wage ◽  
Skilled Labor ◽  
Unskilled Labor ◽  
Directed Technical Change ◽  
Unskilled Workers ◽  
The Stability ◽  
The Relationship

This paper extends the existing theories of directed technical change by allowing the factors of production, skilled, and unskilled workers, to be employed in both the skill-intensive and unskilled-intensive sectors. Consequently, the direction of technical progress and the sectoral allocation of factors are jointly determined. The feedback between technical progress and the allocation of factors leads to new results concerning structural change and directed technical change. An increase in the endowment of a factor leads to a dynamic reallocation of factors toward the sector that uses the factor intensively. The reallocation of factors also affects the stability properties of directed technical change. When the parameter conditions necessary for strong bias are satisfied, the interior regime (nonspecialization) is at most locally stable. More importantly, if the relative endowment of skilled labor becomes too high (low), the economy necessarily specializes in the production of skilled (unskilled)-labor-intensive goods. Last, the relationship between the relative endowment of skilled labor and the steady-state relative wage rate is not necessarily monotonic.

Skilled Labor, Unskilled Labor, and Experience Over Time

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Technical Change ◽  
The United States ◽  
Elasticity Of Substitution ◽  
Relative Wage ◽  
Unskilled Labor ◽  
Skilled Workers ◽  
Skill Bias ◽  
Unskilled Workers ◽  
Joint Behavior ◽  
Over Time

This chapter examines what the joint behavior of relative wage and relative supply reveal about the underlying changes in technology, with a focus on the United States. It distinguishes workers by two characteristics: skill and experience. It classifies the labor force into four kinds of workers: experienced skilled workers, inexperienced skilled workers, experienced unskilled workers, and inexperienced unskilled workers. The equation takes into account the quantities of unskilled inexperienced inputs, unskilled experienced inputs, skilled inexperienced inputs, and skilled experienced inputs, as well as the elasticity of substitution between unskilled inexperienced and unskilled experienced workers, and skilled inexperienced and skilled experienced ones. The results confirm many previous findings of a significant skill bias in technical change between 1960 and 2010, and also reveal an experience bias in technical change over roughly the same period, especially among skilled workers and since the 1980s.

scholarly journals Importing Skill-Biased Technology

2013 ◽  
Vol 5 (2) ◽  
pp. 32-71 ◽  
Author(s):  
Ariel Burstein ◽  
Javier Cravino ◽  
Jonathan Vogel
Keyword(s):  
International Trade ◽  
Small Group ◽  
Skill Premium ◽  
Large Set ◽  
Real Wages ◽  
Large Share ◽  
Capital Equipment ◽  
Analytic Expressions ◽  
Unskilled Workers ◽  
Skilled And Unskilled Workers

The production of capital equipment is concentrated among a small group of countries, and many countries import a large share of their equipment. If capital-skill complementarity is an important feature of technology, international trade may have important effects on the skill premium through its impact on equipment accumulation. In this paper we propose a tractable framework for evaluating this effect, provide simple analytic expressions linking observable changes in import shares by sector to changes in real wages of skilled and unskilled workers (and, therefore, the skill premium), and quantify the importance of this effect for a large set of countries. (JEL E22, F11, F16, J24, L64)

scholarly journals INTERNATIONAL TRADE AND GLOBAL CHALLENGES

2021 ◽  
Author(s):  
Juliia Poliakova ◽  
Larysa Yaremko ◽  
Oksana Shayda
Keyword(s):  
International Trade ◽  
Foreign Trade ◽  
Negative Impact ◽  
Raw Materials ◽  
Negative Influence ◽  
Trade Flows ◽  
Effective Response ◽  
Goods And Services ◽  
Global Challenges ◽  
The World

The article is devoted to the analysis of trends in international trade in the conditions of current global challenges, including the pandemic that led to the introduction of quarantine restrictions, lockdown, and closure of national borders causing one of the largest economic crises in the last century. The article also aims to substantiate the role of exports for economic development of countries. Important global trends that have been observed are identified, the processes of development of the sphere of international trade are determined, and the position of the World Trade Organization in the researched issues is highlighted. The article outlines the peculiarities of the application of a number of measures aimed at regulating foreign trade flows including a significant restriction of exports of certain categories of goods and simplification of import procedures for goods needed to combat the pandemic in the countries of the world. An econometric model (a panel regression model) is constructed to illustrate the dependence of the gross domestic product of the twenty leading countries on their exports of goods and services. The study proves that the growth of exports of goods and services will directly lead to GDP growth. It is substantiated that, in the conditions of emergence and long-term action of the trends and with a simultaneous absence of means preventing the negative influence of global factors on international trade in general and foreign trade of separate countries of the world, there is a danger of reduction of their role as an important factor of economic growth. The trends of development of foreign trade of Ukraine are considered in the period of the pandemic, in particular its commodity and geographical structure, rates of change of volumes of trade flows. The stress is laid on the high export-oriented raw materials, the steady trend of import dependence and the preservation of the negative balance of the foreign trade balance of our country. The common features and differences in the processes of foreign trade operations by the EU member states and Ukraine are summarized. Emphasis is placed on the need to create effective response mechanisms at the state level that can reduce the negative impact of global challenges on the country’s foreign trade.

Internal Geography, Labor Mobility, and the Distributional Impacts of Trade

2019 ◽  
Vol 11 (3) ◽  
pp. 252-288 ◽  
Author(s):  
Jingting Fan
Keyword(s):  
International Trade ◽  
Skill Premium ◽  
Domestic Economy ◽  
Spatial Equilibrium ◽  
Spatial Equilibrium Model ◽  
Unskilled Workers ◽  
And Migration ◽  
Migration Costs ◽  
Skilled And Unskilled Workers ◽  
Distributional Impacts

I develop a spatial-equilibrium model to quantify the distributional impacts of international trade in an economy with intranational trade and migration costs. Focusing on China, I find that international trade increases both between-region inequality among workers with similar skills and within-region inequality between skilled and unskilled workers, with the former accounting for 75 percent of the overall inequality increase. Ignoring spatial frictions will underestimate trade’s impact on the overall inequality and overestimate its impact on the aggregate skill premium. I further study how internal trade and Hukou reforms affect the domestic economy and the impacts of international trade. (JEL F14, F16, J24, O18, P23, P33, R12)

scholarly journals International Trade and Human Capital Investment with Heterogeneous Firms and Workers: Modeling and Analysis

Mathematics ◽  
2021 ◽  
Vol 9 (10) ◽  
pp. 1106
Author(s):  
Jaewon Jung
Keyword(s):  
Human Capital ◽  
International Trade ◽  
Organizational Behavior ◽  
Capital Accumulation ◽  
Global Economy ◽  
Capital Investment ◽  
Investment Decision ◽  
Heterogeneous Firms ◽  
Modeling And Analysis ◽  
Trade Model

Though the importance of organizational behavior and human decision processes within firms for the firm performance has largely been recognized in the business and management literature, much less attention has been devoted to studying such implications in the international trade context. This paper develops a general-equilibrium trade model in which heterogeneous workers make an investment decision in acquiring advanced managerial skills and choose their optimal effort level based on their comparative advantage. In doing so, we show how globalization-induced human capital accumulation within firms leads to sustainable economic growth. We also show that workers’ organizational belief and CEO’s managerial vision may be an important element for the human capital formation within firms and for the performance of firms in a global economy.

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