Matching, sorting, and the distributional effects of international trade

Gene M. Grossman, Elhanan Helpman, Philipp Kircher

Research output: Contribution to journalArticlepeer-review

Abstract

We study the distributional consequences of trade in a world with two industries and two heterogeneous factors of production. Productivity in each production unit reflects the ability of the manager and the abilities of the workers, with complementarity between the two. We begin by examining the forces that govern the sorting of worker and manager types to industries and the matching of workers and managers within industries. We then consider how changes in relative output prices generated by changes in the trading environment affect sorting, matching, and the distributions of wages and salaries.
Original languageEnglish
Pages (from-to)224-264
JournalJournal of Political Economy
Volume125
Issue number1
Early online date16 Dec 2016
DOIs
Publication statusPublished - Feb 2017

Keywords

  • heterogeneous labor
  • matching
  • sorting
  • productivity
  • wage distribution
  • international trade

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