Javier Cravino (Michigan) will present:
"Trade-induced structural change and the skill premium"
at 12:15pm on Tuesday, April 25, 2017 in (051 Buchanan) Volanakis - TUCK
Lunch will be served at noon.

If you will be attending the Lunch Seminar and have not already done so, please RSVP to Doreen Aher at TUCK so she can order the appropriate amount of food.

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Please sign up for a meeting or dinner at:
https://docs.google.com/spreadsheets/d/1OixtVZOy9qxJLs1gZWoRsXF86esU1wtIpluFRyWTQQ0/edit?usp=sharing

Abstract

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. We document that manufacturing production is unskilled-labor intensive, so that these changes increase the skill-premium. We incorporate this mechanism into a quantitative trade model, and use the model to measure how changes in trade patterns between 1995 and 2007 affected manufacturing employment and the skill premium. In the model, in response to the changes in trade costs that we estimate for this period, manufacturing employment falls while the skill premium rises simultaneously in almost every country. The impact on the skill premium is larger in developing countries where manufacturing is particularly unskilled-labor intensive.






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