Linked employer-employee data for Brazil over a period of large-scale trade liberalization document two salient workforce changeovers. Within the traded-goods sector, there is a marked occupation downgrading and a simultaneous education upgrading by which employers fill expanding low-skill intensive occupations with increasingly educated jobholders. Between sectors, there is a labor demand shif...

Recent literature on the labor-market effects of U.S. immigration tends to find little correlation between regional immigrant inflows and changes in relative regional wages. In this paper we examine whether immigration, or endowment shocks more generally, altered U.S. regional output mixes as predicted by the Rybczynski Theorem of Heckscher-Ohlin (HO) trade theory. This theorem describes how re...

The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to ‡ow to capital-scarce countries. In this paper we show that in a world with heterogeneous …nancial development, the classic conclusion does not hold. In particular, in less …nancially developed economies (South), trade a...

Although it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce, only a handful of studies have addressed this topic. These studies have focused largely on testing two models, both of which emphasize that trade preferences are shaped by how trade affects an individual's income. The factor endowments or Heckscher-Ohli...

In the paper we introduce technological comparative advantage and transaction costs into the Heckscher-Olin (HO) model and refine the HO theorem, the Stolper-Samuelson theorem, the Rybczynski theorem, and factor equalization theorem. The refined core theorems can be used to accommodate recent empirical evidence that is at odds with the core theorems.

Abstract: This introduction surveys the evidence on the linkages between globalization and poverty, drawing on fifteen papers prepared for an NBER project under my direction. We focus on two measures of globalization: trade integration (measured using tariffs or trade flows), and international capital flows. Many economists have used the Heckscher-Ohlin framework in international trade to argue...

The aggregated incidence of bilateral trade costs is derived from the gravity model. Incidence is equivalent to a TFP penalty. Sectoral and national differences in TFP have sharp implications for the equilibrium pattern of production and trade in a specific factors model of production. Unskilled labor is intersectorally mobile. Skilled labor acquires sector specific skills. Productivity shocks ...

There is little disagreement among most economists that countries benefit from trade liberalization. Yet, whether unilateral, multilateral (through the World Trade Organization) or through regional integration agreements (RIAs), trade liberalization has been one of the most controversial economic issues of our time. It is the focus of everyone from politicians to union leaders and anti-globaliz...

ly speaking, we can identify three primary principles of social organization. Hierarchy uses authority to create and coordinate a horizontal and vertical division of labor—a bureaucracy in Weber’s ideal-type form. Market relies on the price mechanism to coordinate competing and anonymous suppliers and buyers. Community relies on shared values and norms. Table 1.1 summarizes the key contrasts. R...