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Occupational Choice, Aggregate Productivity, and Trade

Author

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  • Meckl, Jürgen

    (Justus Liebig University, Giessen)

  • Weigert, Benjamin

    (German Council of Economic Experts)

Abstract

We propose occupational decisions of heterogeneous individuals as an alternative mechanism of explaining the distribution of firm productivities emphasized by empirical studies. Thus, we integrate the frameworks of Melitz (2003), and of Manasse and Turrini (2001) that establish the theoretical base of trade models with heterogeneous firms. Our model is technically much simpler than the Melitz approach while preserving the main results on firm-selection effects due to international market integration. Our approach paves the way for detailed analysis of institutions in a heterogeneous firm model to better understand the link between institutions and an economy’s productivity distribution.

Suggested Citation

  • Meckl, Jürgen & Weigert, Benjamin, 2011. "Occupational Choice, Aggregate Productivity, and Trade," IZA Discussion Papers 5497, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5497
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    References listed on IDEAS

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    1. Del Gatto, Massimo & Mion, Giordano & Ottaviano, Gianmarco I.P., 2006. "Trade Integration, Firm Selection and the Costs of Non-Europe," Conference papers 331548, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    Cited by:

    1. Hea-Jung Hyun & Yong Joon Jang, 2015. "Comparative Advantage, Outward Foreign Direct Investment and Average Industry Productivity: Theory and Evidence," Korean Economic Review, Korean Economic Association, vol. 31, pages 327-357.
    2. Ma, Lin & Ruzic, Dimitrije, 2020. "Globalization and top income shares," Journal of International Economics, Elsevier, vol. 125(C).
    3. Bohdan Kukharskyy, 2012. "Trade, Superstars, and Welfare," Working Papers 120, Bavarian Graduate Program in Economics (BGPE).
    4. Marco Pinto & Jochen Michaelis, 2014. "International Trade and Unemployment—the Worker-selection Effect," Review of International Economics, Wiley Blackwell, vol. 22(2), pages 226-252, May.

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    More about this item

    Keywords

    firm selection; heterogeneous productivities; intra-industry trade; occupational choice;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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