Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10478782 | Journal of Monetary Economics | 2005 | 19 Pages |
Abstract
Empirical evidence shows that while the skill premium narrowed in some developing countries following trade liberalization, it widened in others, or even exhibited non-monotonic behavior. This paper studies a simple dynamic general equilibrium trade model in which differences in initial conditions across developing countries play a key role in explaining the variety of skill premium behaviors. Differences in initial conditions in terms of skilled labor and physical capital emerge in the model due to differences in trade policies. The model can generate non-monotonic behavior for the skill premium following trade liberalization.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Marla Ripoll,