The Distribution of Talent and the Pattern and Consequences of International Trade
Year: 2004
Type: article
Abstract: I study the interaction between imperfect labor contracts and international trade in a setting in which workers have private information about their own abilities. When an individual’s contribution to firm output can be measured accurately in some activities but not in others, the most able workers select occupations in which their pay most closely reflects their own performance. In a world economy with two otherwise similar countries that have different distributions of talent, the country with the more heterogeneous labor force exports the good that is produced by the most talented individuals. In this country, trade exacerbates the “polarization” of the labor force and often worsens the distribution of income.
Source: Journal of Political Economy
DOI: 10.1086/379935
Author: Gene M. Grossman
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3122228769