English, Article, Journal or magazine article edition: Skill Dierentiation and Income Disparity in a Decentralized Matching Model of North-South Trade Hesham M. Abdel-Rahman; George Norman; Ping Wang

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Bookmark: http://trove.nla.gov.au/version/200671
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Skill Dierentiation and Income Disparity in a Decentralized Matching Model of North-South Trade
Author
  • Hesham M. Abdel-Rahman
  • George Norman
  • Ping Wang
Physical Description
  • preprint
Notes
  • This paper develops a North-South trade model in which the South produces food and the North produces both food and a high-tech good. Food production is undertaken by unskilled workers while the high-tech product is made only by horizontally dierentiated skilled workers. Due to the possibility of a peer-group effect, we allow the unskilled workers in the North to be equally or more productive than in the South. Horizontal matching of skilled workers is generally imperfect and the skilled wages are determined by a symmetric Nash bargain. We characterize two dierent types of equilibrium: a closed-economy equilibrium without trade and a free trade equilibrium without labor mobility. We then extend the benchmark framework to consider the presence of transport costs. In all cases with trade, the equilibrium properties of goods pricing, the volume of trade and wage disparities are examined.
  • skill heterogeneity and matching, north-south trade, wage inequality
  • RePEc:tuf:tuftec:0115
Language
  • English
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