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Trade, educational costs, and skill acquisition

Author

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  • Shihui Ma
  • Yue Liu
  • Mohan Zhou

Abstract

A model of heterogeneous agents is built to study the effects of trade and educational costs in shaping individual educational outcomes and their aggregate distribution. In a two‐country model, trade has nonmonotonic impacts on individual education choices and causes education and job polarization for both countries. We use this model to evaluate the effects of reductions in educational costs. A reduction in educational cost has no impact on occupational choice in a closed economy. In the open economy, however, it creates an expanded middle class in the home country, whereas the opposite happens in its trading partner.

Suggested Citation

  • Shihui Ma & Yue Liu & Mohan Zhou, 2019. "Trade, educational costs, and skill acquisition," Review of International Economics, Wiley Blackwell, vol. 27(5), pages 1460-1479, November.
    • Handle: RePEc:bla:reviec:v:27:y:2019:i:5:p:1460-1479
    DOI: 10.1111/roie.12431
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    Cited by:

    1. Waheed Hammad & Wajeha Al-Ani, 2021. "Building Educational Research Capacity: Challenges and Opportunities From the Perspectives of Faculty Members at a National University in Oman," SAGE Open, , vol. 11(3), pages 21582440211, July.
    2. Ghose,Devaki, 2021. "Trade, Internal Migration, and Human Capital : Who Gains from India’s IT Boom?," Policy Research Working Paper Series 9738, The World Bank.

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