A new presentation of the specific factors model shows how labor fares under international trade by considering how the price elasticity of the nominal wage rate responds to the terms of trade as well as factor endowments. Gains to labor are decomposed into measurable terms of trade effects and production bias effects. If trade is caused by differences in technology, trade can harm the interest...

away from short-term dynamics of the business cycle that might impact inequality. Second, the inequality data are available for only a limited number of years for many countries and there are often substantial gaps in the time-series. A truly dynamic statistical model is, therefore, beyond the available data. Initially, we estimate simple cross-sectional regressions of the sort outlined in (Bec...

In this study, we look at the determinants of industry-level capital intensities. Using cross-country data, we find that the most important determinant is a country’s factor endowment. In addition, we find that measures of labor regulation and financial development also matter: less restrictive labor regulations and greater financial development are associated with lower and higher capital-inte...

Labor markets are the most important mediator of German uniication and wages are a central indicator of its progress. Starting from the observation that a wage diierential between two workers can arise either because workers have diierent endowments of human capital characteristics or remuneration to these characteristics diier, we apply an Oaxaca-style decomposition to the post-uniication wave...

This paper studies the optimal direct/indirect tax mix problem when individuals differ in several unobservable characteristics (productivity and endowments). It presents general expressions for the optimal commodity tax rates and proves that contrary to Atkinson and Stiglitz’s (1976) result, differential commodity taxation remains a useful instrument of tax policy even if preferences are separa...

This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax in a jurisdiction may be positive. In a symmetric equilibrium, this will be true if the median capit...

Within an endogenous growth framework, we examine dynamic gains from trade for parametrically distinct countries. In the absence of international spillovers or factor mobility, previous endogenous growth models generally imply that trade in goods must amplify differences in (1) factor endowments, (2) rates of technical change and (3) economic growth. Even the dynamic HOS model suggests that tra...

I develop a factor content of trade prediction for the Heckscher-OhlinVanek model (HOV) that relates bilateral differences in country endowments to bilateral differences in factor contents. The results are striking. In comparisons of North-South factor contents or factor contents of countries with very different endowments (e.g., with very different capital-labor ratios), there is clear support...

Promotion of low-skilled off-farm rural labor market participation can be an important strategy to improve livelihoods and food security of the poor in developing countries. This paper investigates rural farm households' participation in low-skilled off-farm labor markets with disaggregate data from a survey of 400 households in Tigray, the northern highlands of Ethiopia. Adopting Heckman's two...

Wage Differentials in the 1990s in Israel: Endowments, Discrimination, and Selectivity The purpose of this paper is to investigate wage structures of professional workers in the Israeli labor market, using data from the most recent 1995 Census and correcting for selectivity at the stage of entrance into the occupation. The sample of professionals is decomposed into several subsamples: men and w...