Factor price overshooting with trade liberalization
Theory and evidence
Bibliographic Data
| ID | 10494036 |
|---|---|
| Authors | Julian Emami Namini (Erasmus University Rotterdam and Centro Studi Luca d'Agliano, corresponding author), Ricardo A López (Brandeis University) |
| Year | 2013 |
| Volume | 60 |
| Issue | 2 |
| Pages | 139-181 |
| Publication date | 2013-03-04 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Scottish Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0036-9292 • E-ISSN: 1467-9485 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/sjpe.12006 |
| OpenAlex | W2108851872 |
| Language | EN |
| Citations received | 2 |
| References cited | 37 |
This paper develops an intra‐industry trade model with skilled and unskilled labor as factors of production, endogenous accumulation of skilled labor and firm heterogeneity in factor intensities to examine the effect of trade reforms on factor prices. Since exporters are more skill intensive than non–exporters, a decrease in trade barriers initially increases wage inequality between skilled and unskilled workers, as a result of an increase in the relative demand for skilled labor. Over time, however, as agents respond to the change in relative wages by investing in skilled labor, the relative wage of skilled labor decreases. Evidence from Chilean plant–level data supports the idea of factor price overshooting with trade liberalization
Economics · Factor price · Free trade · Inequality · International economics · Labour economics · Liberalization · Macroeconomics · Market economy · Microeconomics · Monetary economics · Production (economics · Relative price · Wage · Wage Inequality · Wage rate · Firm Innovation and Growth · Global Trade and Competitiveness · Global trade and economics
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| Unique citing works | 2 |
|---|---|
| Citations per year | 0,13 |
| Citation span | 2011 - 2025 (15) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 2 |