Trade, education, and the shrinking middle class

• 成果类型: Article
• 署名作者: Blanchard, Emily; Willmann, Gerald
• 署名单位: Dartmouth College; University of Bielefeld; Leibniz Association; Institut fur Weltwirtschaft an der Universitat Kiel (IFW)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2015.10.007
• 发表日期: 2016
• 页码: 263-278
• 关键词: Endogenous skill acquisition; Income distribution; TARIFFS; education

摘要

We develop a new model of trade in which educational institutions drive comparative advantage and the distribution of human capital within and across countries. Our framework exploits a multiplicity of sectors and a continuous support of human capital choices to demonstrate that freer trade can induce crowding out of the middle occupations toward the skill acquisition extremes in one country and simultaneous expansion of middle-income industries in another. Individual gains from trade may be non-monotonic in workers' ability, and middle ability agents can lose the most from trade liberalization. Comparing trade and education policies, our model indicates that targeted education subsidies like Trade Adjustment Assistance are the most effective mechanism to bolster the middle class. (C) 2016 The Authors. Published by Elsevier B.V.