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Quality Differentiation and the Labour Market Effects of International Trade

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Abstract

This paper offers a new treatment of the labour market effects of international trade, based on a model in which intra-industry trade is explained on Heckscher-Ohlin principles. The model is more consistent with stylised facts about North-South trade than the traditional Heckscher-Ohlin model of inter-industry trade. Applying the model to trade between Italy and ‘non-advanced countries’ and inferring the factor content of intra-industry trade from the inter-sectoral relationship between factor intensity and average unit values of exports, we find that the labour market effects of intra- industry trade add significantly to the estimated factor market impact of trade.

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  • Giuseppe Celi & Alasdair Smith, 1999. "Quality Differentiation and the Labour Market Effects of International Trade," CELPE Discussion Papers 50, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    • Handle: RePEc:sal:celpdp:50
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    6. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    7. Johan Torstensson, 1991. "Quality differentiation and factor proportions in international trade: An empirical test of the Swedish case," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(1), pages 183-194, March.
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    Cited by:

    1. Peter Huber & Helmut Hofer, 2001. "Teilprojekt 9: Auswirkungen der EU-Erweiterung auf den österreichischen Arbeitsmarkt," WIFO Studies, WIFO, number 19839, March.
    2. Raphael Kaplinsky & Amelia Santos Paulino, 2005. "Innovation and Competitiveness: Trends in Unit Prices in Global Trade," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 333-355.
    3. Celi, Giuseppe, 2010. "Empirical Explanation of Vertical and Horizontal Intra-industry Trade in the UK: A Comment - Spiegazioni empiriche del commercio intra-industriale verticale ed orizzontale del Regno Unito: un commento," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(1), pages 53-90.
    4. Gabrisch, Hubert, 2009. "Vertical Intra-Industry Trade, Technology and Income Distribution: A Panel Data Analysis of EU Trade with Central-East European Countries," MPRA Paper 64181, University Library of Munich, Germany.
    5. Gabrisch, Hubert, 2006. "Vertical Intra-industry Trade between EU and Accession Countries," IWH Discussion Papers 12/2006, Halle Institute for Economic Research (IWH).

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    More about this item

    Keywords

    intra-industry trade; North-South trade; vertical product differentiation; labour market effects of international trade;
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    JEL classification:

    • F10 - International Economics - - Trade - - - General

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