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http://ssrn.com/abstract=489684
 
 

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The Distribution of Talent and the Pattern and Consequences of International Trade


Gene M. Grossman


Princeton University - Woodrow Wilson School of Public and International Affairs; Princeton University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)


Journal of Political Economy, Vol. 112, No. 1, Pt. 1, pp. 209-39, February 2004

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.

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Date posted: January 27, 2004  

Suggested Citation

Grossman, Gene M., The Distribution of Talent and the Pattern and Consequences of International Trade. Journal of Political Economy, Vol. 112, No. 1, Pt. 1, pp. 209-39, February 2004. Available at SSRN: http://ssrn.com/abstract=489684

Contact Information

Gene M. Grossman (Contact Author)
Princeton University - Woodrow Wilson School of Public and International Affairs ( email )
300 Fisher Hall
Prospect Avenue
Princeton, NJ 08544-1021
United States
609-258-4823 (Phone)
609-258-1374 (Fax)
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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