Trade, Superstars, and Welfare

Arbeitspapier

In recent decades, many countries experienced both a rise in top income shares and an increase of income inequality among the top earners. In this paper, I study the role of international trade as a catalyst for this development and analyze the associated welfare effects. I build a simple general equilibrium model that incorporates Lucas' (1978) idea of individual heterogeneity regarding managerial talents into the framework of intra-industry trade with two symmetric countries. By scrutinizing effects of trade integration on entrepreneurial compensation and endogenous occupational decisions, this model can reproduce the observed pattern of income changes in the top percentiles. Despite positive joint welfare effects of trade liberalization, individual gains from trade may be non-monotonic in agents' skills. While the welfare of workers and most productive entrepreneurs unambiguously rises, the least- and medium-productive entrepreneurs may be worse off, if their preferences for the traded goods are small enough.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: BGPE Discussion Paper ; No. 120

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade and Labor Market Interactions ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Personal Income, Wealth, and Their Distributions
• Thema: Distributional effects of trade ; individual welfare ; occupational choice ; superstars. ; Managervergütung ; Einkommensverteilung ; Führungskräfte ; Außenwirtschaft ; Globalisierung ; Außenhandelsgewinn ; Wohlfahrtsanalyse ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kukharskyy, Bohdan
• Ereignis: Veröffentlichung
• (wer): Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE)
• (wo): Nürnberg
• (wann): 2012

Weitere Informationen

• Handle: http://hdl.handle.net/10419/73461
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ