Fairness, trade, and inequality

• 成果类型: Article
• 署名作者: Egger, Hartmut; Kreickemeier, Udo
• 署名单位: University of Bayreuth; Leibniz Association; Ifo Institut; University of Nottingham; Leibniz Association; Institut fur Weltwirtschaft an der Universitat Kiel (IFW); Eberhard Karls University of Tubingen
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.10.002
• 发表日期: 2012
• 页码: 184-196
• 关键词: Heterogeneous firms; income inequality; Fair wages; unemployment

摘要

We develop a model of international trade between two symmetric countries that features inter-group inequality between managers and workers, and also intra-group inequality within each of those two groups. Individuals are heterogeneous with respect to their managerial ability, and firms run by more able managers have a higher productivity level and make higher profits. There is rent sharing at the firm level due to fair wage preferences of workers, and hence firms with higher profits pay higher wages in equilibrium in order to elicit their workers' full effort. We show that in this framework international trade leads to a self-selection of the best firms into export status, with exporting firms having to pay a wage premium. Aggregate welfare increases, but there is also larger inequality along multiple dimensions: Involuntary unemployment and income inequality between managers and workers increase, and so does inequality within these two subgroups of individuals, as measured by the respective Gini coefficients. (C) 2011 Elsevier B.V. All rights reserved.