Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9551102 | European Economic Review | 2005 | 27 Pages |
Abstract
We develop a model where trade liberalization leads to skill-biased technological change, which in turn raises the relative return to skilled labor. When firms get access to a larger market, the relative profitability of different technologies changes in favor of the more skill-intensive technology. As the composition of firms changes to one with predominantly skill-intensive firms, the relative demand for skilled labor increases. This way, we establish a link between trade, technology and relative returns to skilled and unskilled labor.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Karolina Ekholm, Karen Helene Midelfart,