Wage Bargaining, Vertical Differentiation, and Intra-industry Trade Liberalization
Bacchiega, Emanuele
Wage Bargaining, Vertical Differentiation, and Intra-industry Trade Liberalization - 2013.
1
This paper appraises the effects of trade liberalization between two industries with different endowments of skilled labor. Skilled labor is necessary for the production of higher-quality variants of a vertically differentiated good. Skilled labor endowments therefore determine the pattern of specialization of industries as well as their market structure, both in the market for the product and in the labor market. We analyze how market integration benefits (or harms) agents in specific industries by delving into the linkages between labor and markets for products, and show that bilateral losses from trade can emerge at equilibrium point. Classification JEL : L13, J51, F16.
Wage Bargaining, Vertical Differentiation, and Intra-industry Trade Liberalization - 2013.
1
This paper appraises the effects of trade liberalization between two industries with different endowments of skilled labor. Skilled labor is necessary for the production of higher-quality variants of a vertically differentiated good. Skilled labor endowments therefore determine the pattern of specialization of industries as well as their market structure, both in the market for the product and in the labor market. We analyze how market integration benefits (or harms) agents in specific industries by delving into the linkages between labor and markets for products, and show that bilateral losses from trade can emerge at equilibrium point. Classification JEL : L13, J51, F16.
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