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Endogenous Labor Supply and International Trade

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Listed:
  • Tadashi Morita
  • Takanori Ago
  • Takatoshi Tabuchi
  • Kazuhiro Yamamoto

Abstract

It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.

Suggested Citation

  • Tadashi Morita & Takanori Ago & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2015. "Endogenous Labor Supply and International Trade," ERSA conference papers ersa15p853, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p853
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    References listed on IDEAS

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    Cited by:

    1. Juan Carlos Lopez & Tadashi Morita, 2024. "Public good provision and progressive income taxation in a spatial economy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(3), pages 979-1003, October.
    2. Takanori Ago & Tadashi Morita & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2018. "Elastic labor supply and agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 350-362, March.
    3. Carroni, Elias & Delogu, Marco & Pulina, Giuseppe, 2023. "Technology adoption and specialized labor," International Economics, Elsevier, vol. 173(C), pages 249-259.
    4. Hajime Takatsuka & Dao‐Zhi Zeng, 2018. "Elastic labor supply, variable markups, and spatial inequalities," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1084-1100, November.
    5. Xinmeng Li & Dao-Zhi Zeng, 2022. "Frictional unemployment, bargaining, and agglomeration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(1), pages 151-179, February.

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    More about this item

    Keywords

    international trade; variable markup; endogenous labor supply;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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