Matching, sorting, and the distributional effects of international trade

Gene M. Grossman, Elhanan Helpman, Philipp Kircher

Research output: Contribution to journalArticlepeer-review

27 Scopus citations

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
Number of pages41
JournalJournal of Political Economy
Volume125
Issue number1
DOIs
StatePublished - Feb 2017
Externally publishedYes

Funding

FundersFunder number
Suntory-Toyota International Centre for Economics and Related Disciplines at the London School of Economics
National Science Foundation
European Research Council

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