Globalization, Labor Markets & Inequality - World Trade Institute
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
WTI, University of Bern
Hallerstrasse 6
CH-3012 Bern, Switzerland
T +41 31 684 32 70
www.wti.org
WTI PhD COURSE
Globalization, Labor Markets & Inequality
29 June – 09 July 2021
Professor: Douglas Nelson
Office: Tilton 108 (Murphy Institute)
Office Hours: Tuesday and Thursday, 3:30-5:30
Phone: +1 504 862-3208
email: dnelson@tulane.edu
Webpage: http://nelson.wp.tulane.edu/
The relationship between economic globalization and economic inequality is an issue of first-rate
significance scientifically, politically and socially. There is considerable evidence that, since
sometime in the 1980s at the earliest, a fundamental change in globalization has occurred. These
changes affect both the distribution of economic activity and the returns from that activity, both
between and within nations. The rise of anti-global populism around the world renders these
issues even more important. Trade and migration seem to be the two flash-points for these
politics.
The appropriate theoretical and empirical tools for the study of these issues is distributed more-
or-less equally between trade and labor economics. Work in these fields is often seen as in
conflict. In this course, although the main focus will be on trade, we will also develop some of
the main lines of research on the labor market effects of migration, in both cases emphasizing the
links between theoretical and empirical research.
Evaluation: Your performance in this course will be evaluated on the basis of class participation
(worth 20%), presentation of published papers (worth 30%); and a research paper (worth 50%).
Readings for the course will be drawn from the classic and current research papers on the topics.
The attached syllabus contains live links to those papers.
Class participation. This course is intended to be a seminar. That is, while I will present
lectures on basic background and results in each topic, I expect there to be active discussion of
the assigned material.
Presentation of published papers. There are far more papers on the syllabus than we can
discuss in any detail. However, partly as a way to induce discussion and partly to develop the
skills of presentation that you will need as professional academics, everyone will present at least
one of the research papers on the syllabus. Depending on the number of people registered, wemight be able to get two presentations per person.
Research paper. Every member of the course is required to produce a research paper on some
aspect of the effect of globalization on labor markets and/or international inequality. These
papers must be original work, plagiarism will not be tolerated. Broadly speaking, I expect
papers in the 25-35 page range. To ensure that topics are well-established and suitable for the
course, I require a proposal due no later than the fifth meeting of the course. You are unclear.
But don't wait until the last minute, by then it is usually too late.
Timetable. 10 lectures: Total No. of hours: 25 hours. 4 ECTS. Class hours are 16:00pm-
18:30pm, Monday – Friday, from Monday 28.06 – Friday 09-07. This is an intensive course.
Please try to do (some) readings already before the course-week starts.
2SYLLABUS 29 June–09 July 2021
Lecture 1: Course Introduction & Review of Basic Frameworks
○ Milanovic (2016). Global Inequality: A New Approach for the Age of Globalization.
[Chapters 1-3]
○ Morelli, Smeeding and Thompson (2015). “Post-1970 Trends in within-Country
Inequality and Poverty: Rich and Middle-Income Countries,” in Atkinson and
Bourguignon eds, Handbook of Income Distribution. Amsterdam: Elsevier, 593-696.
○ Anand and Segal (2015). “The Global Distribution of Income,” in Atkinson and
Bourguignon eds, Handbook of Income Distribution. Amsterdam: Elsevier, 937-79.
● Katz and Autor (1999). “Changes in the Wage Structure and Earnings Inequality,” in
O. C. Ashenfelter and D. Card, eds, Handbook of Labor Economics. Amsterdam:
Elsevier, 1463-1555.
○ Acemoglu and Autor (2011). “Skills, Tasks and Technologies: Implications for
Employment and Earnings,” in D. Card and O. C. Ashenfelter eds, Handbook of Labor
Economics. Amsterdam: Elsevier, 1043-1171.
● Autor (2013). “The ‘Task Approach’ to Labor Markets an Overview.” Journal of
Labor Market Research, V.3, 185-99.
○ Costinot and Rodríguez-Clare (2015). “Trade Theory with Numbers: Quantifying the
Consequences of Globalization,” in E. Helpman, K. S. Rogoff and G. Gopinath eds,
Handbook of International Economics. Elsevier, 197-261.
Lecture 2: Traditional GE of Trade & Wages
● Jones (1965). “The Structure of Simple General Equilibrium Models.” Journal of
Political Economy, V.73-#6, 557-72.
● Jones and Scheinkman (1977). “Relevance of 2-Sector Production Model in Trade
Theory.” Journal of Political Economy, V.85-#5, 909-35.
○ Jones (1971). “A Three Factor Model in Theory, Trade and History,” in J. Bhagwati, R.
W. Jones, R. A. Mundell and J. Vanek eds, Trade, Balance of Payments and Growth:
Essays in Honor of Charles P. Kindleberger. Amsterdam: North-Holland, 3-21.
Lecture 3: Economy-wide Empirics on Effects of Globalization
● Borjas, Freeman and Katz (1997). “How Much Do Immigration and Trade Affect
Labor Market Outcomes?” Brookings Papers on Economic Activity, -#1, 1-90.
● Borjas (2003). “The Labor Demand Curve Is Downward Sloping: Reexamining the
Impact of Immigration on the Labor Market”. Quarterly Journal of Economics, 118(4),
pp. 1335-74.
● Ottaviano and Peri (2012). “Rethinking the Effect of Immigration on Wages.” Journal
of the European Economic Association, 10(1), 152-97 (esp. 185-197).
○ Deardorff and Staiger (1988). “An Interpretation of the Factor Content of Trade”.
Journal of International Economics; V.24-#1/2, pp. 93-107.
○ Leamer (2000). “What’s the Use of Factor Contents?” Journal of International
3Economics, V.50-#1, 17-49.
○ Krugman (2000). “Technology, Trade and Factor Prices.” Journal of International
Economics, V.50-#1, 51-71.
○ Deardorff, (2000). “Factor Prices and the Factor Content of Trade Revisited: What’s
the Use?” Journal of International Economics, V.50-#1, 73-90.
○ Bensidoun, Jean and Sztulman (2011). “International Trade and Income Distribution:
Reconsidering the Evidence.” Review of World Economics, V.147-#4, 593-619.
○ Adão, Carrillo, Costinot, Donaldson and Pomeranz (2020). “International Trade and
Earnings Inequality: A New Factor Content Approach,” NBER Working Paper, #28263.
○ Desjonqueres, Machin and van Reenen (1999). “Another Nail in the Coffin? Or Can
the Trade Based Explanation of Changing Skill Structures Be Resurrected?” The
Scandinavian Journal of Economics, V.101-#4, 533-54.
○ Lawrence and Slaughter (1993). “International Trade and American Wages in the
1980s: Giant Sucking Sound or Small Hiccup?” Brookings Papers on Economic Activity.
Microeconomics, V.1993-#2, 161-226.
● Baldwin and Cain (2000). “Shifts in Relative U.S. Wages: The Role of Trade,
Technology, and Factor Endowments.” Review of Economics and Statistics, V.82-#4,
580-95.
○ Harrigan (2000). “International Trade and American Wages in General Equilibrium,
1967-1995,” in R. C. Feenstra ed The Impact of International Trade on Wages. Chicago:
University of Chicago Press, 171-96.
○ Leamer (1997). “In Search of Stolper-Samuelson Effects on U.S. Wages,” in S. Collins
ed Imports, Exports and the American Worker. Washington, DC: Brookings Institution,
141-214.
○ Hanson and Slaughter (2002). “Labor Market Adjustment in Open Economies:
Evidence from US States.” Journal of International Economics, V.57-#1, 3-29.
○ Card and Lewis (2007). “The Diffusion of Mexican Immigrants During the 1990s:
Explanation and Impacts,” in G. J. Borjas ed Mexican Immigration to the United States.
Chicago: University of Chicago Press/NBER, 193-277.
○ Hijzen and Wright (2010). “Migration, Trade and Wages”. Journal of Population
Economics; V.23-#4, pp. 1189-1211.
Lecture 4: Traditional GE of Trade & Unemployment
● Brecher (1974). “Minimum Wage Rates and the Pure Theory of International Trade”.
Quarterly Journal of Economics; V.88-#1, pp. 98-116.
● Davis (1998). “Does European Unemployment Prop Up American Wages? National
Labor Markets and Global Free Trade”. American Economic Review; V.88-#3, pp. 478-
494.
○ Diewert (1974). “The Effects of Unionization on Wages and Employment: A General
Equilibrium Analysis”. Economic Inquiry; V.12-/3, pp. 319-339.
○ Hill (1984). “Comparative Statics in General Equilibrium Models with a Unionized
Sector”. Journal of International Economics; V.16-#3/4, pp. 345-356.
● Gaston and Trefler (1995). “Union Wage Sensitivity to Trade and Protection: Theory
and Evidence.” Journal of International Economics, V.39-#1–2, 1-25.
● Kreickemeier and Nelson (2006). “Fair Wages, Unemployment and Technological
4Change in a Global Economy.” Journal of International Economics, V.70-#2, 451-69.
● Davidson, Martin and Matusz (1988). “The Structure of Simple General Equilibrium-
Models with Frictional Unemployment.” Journal of Political Economy, V.96-#6, 1267-
93.
○ Davidson, Martin and Matusz. (1991). “Multiple Free Trade Equilibria in Micro
Models of Unemployment.” Journal of International Economics, V.31-#1-2, 157-69.
● Davidson, Martin and Matusz (1999). “Trade and Search Generated Unemployment.”
Journal of International Economics, V.48-#2, 271-99.
Lecture 5: Local Labor Market Shocks and Adjustment
● Card (1990). “The Impact of the Mariel Boatlift on the Miami Labor-Market”.
Industrial & Labor Relations Review, 43(2), pp. 245-57.
● Borjas (2017). “The Wage Impact of the Marielitos: A Reappraisal.” Industrial &
Labor Relations Review, V.70-#5, 1077-110.
● Peri and Yasenov (2019). “The Labor Market Effects of a Refugee Wave: Synthetic
Control Method Meets the Mariel Boatlift.” Journal of Human Resources, V.54-#2, 267-
309.
○ Burstein, Hanson, Tian and Vogel (2020). “Tradability and the Labor-Market Impact of
Immigration: Theory and Evidence from the United States.” Econometrica, V.88-#3,
1071-112.
● Autor, Dorn and Hanson (2013). “The China Syndrome: Local Labor Market Effects of
Import Competition in the United States.” American Economic Review, V.103-#6, 2121-
68.
● Feenstra and Sasahara (2018). “The ‘China Shock,’ Exports and U.S. Employment: A
Global Input–Output Analysis.” Review of International Economics, V.26-#5, 1053-83.
● Feenstra, Ma and Xu (2019). “US Exports and Employment.” Journal of International
Economics, V.120, 46-58.
○ Caliendo, Dvorkin and Parro (2019). “Trade and Labor Market Dynamics: General
Equilibrium Analysis of the China Trade Shock.” Econometrica, V.87-#3, 741-835.
○ Bloom, Nicholas; Kyle Handley; Andre Kurman and Philippa Luck (2019). “The
Impact of Chinese Trade on Us Employment: The Good, the Bad and the Debatable,”
Stanford Economics working paper.
○ Dauth, Findeisen and Suedekum (2014). “The Rise of the East and the Far East:
German Labor Markets and Trade Integration.” Journal of the European Economic
Association, V.12-#6, 1643-75.
● Dustmann and Glitz (2015). “How Do Industries and Firms Respond to Changes in
Local Labor Supply?” Journal of Labor Economics, V.33-#3, 711-50.
○ Becker and Muendler (2015). “Trade and Tasks: An Exploration over Three Decades
in Germany.” Economic Policy, V.30-#84, 589-641.
○ Adão, Kolesár and Morales (2019). “Shift-Share Designs: Theory and Inference.”
Quarterly Journal of Economics, V.134-#4, 1949-2010.
○ Chetverikov, Larsen and Palmer (2016). “IV Quantile Regression for Group-Level
Treatments, with an Application to the Distributional Effects of Trade.” Econometrica,
V.84-#2, 809-33.
5Lecture 6: Monopolistic Competition
○ Dixit and Stiglitz (1977). “Monopolistic Competition and Optimum Product Diversity.”
American Economic Review, V.67-#3, 297-308.
● Krugman (1979). “Increasing Returns, Monopolistic Competition, and International
Trade.” Journal of International Economics, V.9-#4, 469-79.
○ Krugman (1980). “Scale Economies, Product Differentiation, and the Pattern of
Trade.” The American Economic Review, V.70-#5, 950-59.
○ Lovely and Nelson (2002). “Intra-Industry Trade as an Indicator of Labor-Market
Adjustment”. Weltwirtschaftliches Archiv; V.138-#2, pp. 179-206.
● Epifani and Gancia (2008). “The Skill Bias of World Trade.” The Economic Journal,
V.118-#530, 927-60.
● Dinopoulos, Syropoulos, Xu and Yotov. (2011). “Intraindustry Trade and the Skill
Premium: Theory and Evidence.” Journal of International Economics, V.84-#1, 15-25.
○ Ethier (1982). “National and International Returns to Scale in the Modern Theory of
International Trade.” American Economic Review, V.72-#3, 389-405.
○ Francois and Nelson (2002). “A Geometry of Specialisation.” Economic Journal,
V.112-#481, 649-78.
Lecture 7: Heterogeneous Workers
● Grossman and Maggi (2000). “Diversity and Trade.” American Economic Review,
V.90-#5, 1255-75.
○ Grossman (2004). “The Distribution of Talent and the Pattern and Consequences of
International Trade.” Journal of Political Economy, V.112-#1, 209-39.
● Ohnsorge and Trefler (2007). “Sorting It Out: International Trade with Heterogeneous
Workers.” Journal of Political Economy, V.115-#5, 868-92.
○ Bombardini, Gallipoli and Pupato (2012). “Skill Dispersion and Trade Flows.”
American Economic Review, V.102-#5, 2327-48.
● Costinot and Vogel (2010). “Matching and Inequality in the World Economy.” Journal
of Political Economy, V.118-#4, 747-86.
○ Grossman, Helpman and Kircher (2017). “Matching, Sorting, and the Distributional
Effects of International Trade.” Journal of Political Economy, V.125-#1, 224-64.
Lecture 8A: Heterogeneous Firms
○ Melitz (2003). “The Impact of Trade on Intra-Industry Reallocations and Aggregate
Industry Productivity.” Econometrica, V.71-#6, 1695-725.
○ Demidova, and Rodríguez-Clare (2013). “The Simple Analytics of the Melitz Model in
a Small Economy.” Journal of International Economics, V.90-#2, 266-72.
● Felbermayr, Prat and Schmerer (2011). “Trade and Unemployment: What Do the Data
Say?” European Economic Review, V.55-#6, 741-58.
○ Felbermayr, Prat and Schmerer (2011). “Globalization and Labor Market Outcomes:
Wage Bargaining, Search Frictions, and Firm Heterogeneity.” Journal of Economic
Theory, V.146-#1, 39-73.
6● Trefler (2004). “The Long and Short of the Canada – U.S. Free Trade Agreement.”
American Economic Review, V.94-#4, 870-95.
○ Amiti and Davis (2012). “Trade, Firms, and Wages: Theory and Evidence.” The
Review of Economic Studies, V.79-#1, 1-36.
○ Egger and Kreickemeier (2012). “Fairness, Trade, and Inequality.” Journal of
International Economics, V.86-#2, 184-96.
○ Egger, Egger and Kreickemeier (2013). “Trade, Wages, and Profits.” European
Economic Review, V.64-#0, 332-50.
○ Uysal, Yotov and Zylkin (2015). “Firm Heterogeneity and Trade-Induced Layoffs: An
Empirical Investigation.” European Economic Review, V.75, 80-97.
Lecture 8B: Heterogeneous Firms & Workers
○ Davidson, Matusz and Shevchenko (2008). “Globalization and Firm Level Adjustment
with Imperfect Labor Markets.” Journal of International Economics, V.75-#2, 295-309.
○ Davidson and Matusz (2012). “A Model of Globalization and Firm-Worker Matching:
How Good Is Good Enough?” International Review of Economics & Finance, V.23, 5-
15.
○ Davidson, Heyman, Matusz, Sjöholm and Zhu (2014). “Globalization and Imperfect
Labor Market Sorting.” Journal of International Economics, V.94-#2, 177-94.
○ Davidson, Heyman, Matusz, Sjöholm and Zhu (2016). “Global Engagement, Complex
Tasks and the Distribution of Occupational Employment.” Review of International
Economics, V.24-#4, 717-36.
○ Davidson, Heyman, Matusz, Sjöholm and Zhu (2017). “Global Engagement and the
Occupational Structure of Firms.” European Economic Review, V.100, 273-92.
○ Davidson, Heyman, Matusz, Sjöholm and Zhu (2020). “Globalization, the Jobs Ladder
and Economic Mobility.” European Economic Review, V.127, 103444.
● Helpman and Itskhoki (2010). “Labour Market Rigidities, Trade and Unemployment.”
Review of Economic Studies, V.77-#3, 1100-37.
○ Helpman, Itskhoki, Muendler and Redding (2017). “Trade and Inequality: From
Theory to Estimation.” The Review of Economic Studies, V.84-#1, pp. 357-405.
○ Burstein and Vogel (2017). “International Trade, Technology, and the Skill Premium.”
Journal of Political Economy, V.125-#5, 1356-412.
● Egger, Egger, Kreickemeier and Moser (2020). “The Exporter Wage Premium When
Firms and Workers Are Heterogeneous.” European Economic Review, V.130, 103599.
○ Bombardini, Orefice and Tito (2019). “Does Exporting Improve Matching? Evidence
from French Employer-Employee Data.” Journal of International Economics, V.117,
229-41.
Lecture 9: Second Unbundling–Value Chains, Tasks, etc.
A. Competitive GE & Monopolistic Competition
○ Feenstra and Hanson (1999). “The Impact of Outsourcing and High-Technology
Capital on Wages: Estimates for the United States, 1979-1990.” The Quarterly Journal of
7Economics, V.114-#3, 907-40.
○ Ethier (2005). “Globalization, Globalisation: Trade, Technology, and Wages.”
International Review of Economics & Finance, V.14-#3, 237-58.
● Deardorff (2001). “Fragmentation in Simple Trade Models.” The North American
Journal of Economics and Finance, V.12-#2, 121-37.
● Kohler (2003). “The Distributional Effects of International Fragmentation.” German
Economic Review, V.4-#1, 89-120.
○ Kohler (2004). “International Outsourcing and Factor Prices with Multistage
Production.” Economic Journal, V.114-#494, C166-C85.
○ Grossman and Helpman (2002). “Integration Versus Outsourcing in Industry
Equilibrium.” Quarterly Journal of Economics, V.117-#1, 85-120.
○ Grossman and Helpman (2005). “Outsourcing in a Global Economy.” Review of
Economic Studies, V.72-#1, 135-59.
○ Egger and Egger (2005). “Labor Market Effects of Outsourcing under Industrial
Interdependence.” International Review of Economics & Finance, V.14-#3, 349-63.
○ Egger and Kreickemeier (2008). “International Fragmentation: Boon or Bane for
Domestic Employment?” European Economic Review, V.52-#1, 116-32.
○ Geishecker and Görg (2008). “Winners and Losers: A Micro-Level Analysis of
International Outsourcing and Wages.” The Canadian Journal of Economics, V.41-#1,
243-70.
B. Tasks and Offshoring
○ Antràs, Garicano and Rossi-Hansberg (2006). “Offshoring in a Knowledge Economy.”
Quarterly Journal of Economics, V.121-#1, 31-77.
● Grossman and Rossi-Hansberg (2008). “Trading Tasks: A Simple Theory of
Offshoring.” The American Economic Review, V.98-#5, 1978-97.
○ Grossman and Rossi-Hansberg (2012). “Task Trade between Similar Countries.”
Econometrica, V.80-#2, 593-629.
○ Artuç and McLaren (2015). “Trade Policy and Wage Inequality: A Structural Analysis
with Occupational and Sectoral Mobility.” Journal of International Economics, V.97-#2,
278-94.
○ Wright (2014). “Revisiting the Employment Impact of Offshoring.” European
Economic Review, V.66, 63-83.
○ Robert-Nicoud (2008). “Offshoring of Routine Tasks and (De)Industrialisation: Threat
or Opportunity—and for Whom?” Journal of Urban Economics, V.63-#2, 517-35.
● Baldwin and Robert-Nicoud (2014). “Trade-in-Goods and Trade-in-Tasks: An
Integrating Framework.” Journal of International Economics, V.92-#1, 51-62.
○ Egger, Kreickemeier and Wrona. (2015). “Offshoring Domestic Jobs.” Journal of
International Economics, V.97-#1, 112-25.
○ Ottaviano, Peri and Wright (2013). “Immigration, Offshoring, and American Jobs.”
American Economic Review, V.103-#5, 1925-59.
● Rojas-Romagosa (2012). “Wage Inequality in Trade-in-Tasks Models,” ms: CPB
Netherlands Bureau for Economic Analysis.
○ Van Reenen (2011). “Wage Inequality, Technology and Trade: 21st Century
Evidence.” Labour Economics, V.18-#6, 730-41.
8○ Olney (2012). “Offshoring, Immigration, and the Native Wage Distribution.” The
Canadian Journal of Economics, V.45-#3, 830-56.
● Baumgarten, Geishecker and Görg (2013). “Offshoring, Tasks, and the Skill-Wage
Pattern.” European Economic Review, V.61, 132-52.
● Becker, Ekholm and Muendler (2013). “Offshoring and the Onshore Composition of
Tasks and Skills.” Journal of International Economics, V.90-#1, 91-106.
● Goos, Manning and Salomons (2014). “Explaining Job Polarization: Routine-Biased
Technological Change and Offshoring.” American Economic Review, V.104-#8, 2509-26.
○ Ebenstein, McMillan and Phillips (2013). “Estimating the Impact of Trade and
Offshoring on American Workers Using the Current Population Surveys.” Review of
Economics and Statistics, V.96-#4, 581-95.
● Hummels, Jørgensen, Munch and Xiang (2014). “The Wage Effects of Offshoring:
Evidence from Danish Matched Worker-Firm Data.” American Economic Review, V.104-
#6, 1597-629.
Lecture 10: New Economic Geography & International Inequality
● Krugman and Venables (1995). “Globalization and the Inequality of Nations.”
Quarterly Journal of Economics, V.110-#4, 857-80.
○ Baldwin, Martin and Ottaviano (2001). “Global Income Divergence, Trade, and
Industrialization: The Geography of Growth Take-Offs.” Journal of Economic Growth,
V.6-#1, 5-37.
● Redding and Venables (2004). “Economic Geography and International Inequality.”
Journal of International Economics, V.62-#1, 53-82.
○ Neary (2001). “Of Hype and Hyperbolas: Introducing the New Economic Geography.”
Journal of Economic Literature, V.39-#2, 536-61.
○ Eaton and Kortum (2002). “Technology, Geography, and Trade.” Econometrica, V.70-
#5, 1741-79.
○ Alvarez and Lucas (2007). “General Equilibrium Analysis of the Eaton–Kortum Model
of International Trade.” Journal of Monetary Economics, V.54-#6, 1726-68.
● di Giovanni, Levchenko and Zhang (2014). “The Global Welfare Impact of China:
Trade Integration and Technological Change.” American Economic Journal:
Macroeconomics, V.6-#3, 153-83.
9You can also read
