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Trade and Productivity: The Family Connection Redux

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  • Klaus Prettner
  • Holger Strulik

Abstract

We investigate the effects of human capital accumulation on trade and productivity by integrating a micro-founded education and fertility decision of households into a model of international trade with firm heterogeneity. Our theoretical framework leads to two testable implications: i) the export share of a country increases with the education level of its population, ii) the average profitability of firms located in a country also increases with the education level of its population. We find that these implications are supported by empirical evidence for a panel of OECD countries from 1960 to 2010.

Suggested Citation

  • Klaus Prettner & Holger Strulik, 2015. "Trade and Productivity: The Family Connection Redux," FIW Working Paper series 148, FIW.
    • Handle: RePEc:wsr:wpaper:y:2015:i:148
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    More about this item

    Keywords

    firm heterogeneity; international competiveness; education; fertility decline;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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