Sorting it Out: International Trade with Heterogeneous Workers

Posted: 21 Dec 2007

See all articles by Franziska Ohnsorge

Franziska Ohnsorge

International Monetary Fund (IMF)

Daniel Trefler

University of Toronto - Rotman School of Management; National Bureau of Economic Research (NBER)

Abstract

Each worker brings a bundle of skills to the workplace, for example, quantitative and communication skills. Since employers must take this bundle as a package deal, they choose workers with just the right mix of skills. We show that international differences in the distribution of worker skill bundles - for example, Japan's abundance of workers with a modest mix of both quantitative and teamwork skills - have important implications for international trade, industrial structure, and domestic income distribution. Formally, we model two-dimensional worker heterogeneity and show that the second moments of the distribution of skills are critical, as in the Roy model.

Suggested Citation

Ohnsorge, Franziska and Trefler, Daniel, Sorting it Out: International Trade with Heterogeneous Workers. Journal of Political Economy, Vol. 115, No. 5, 2007, Available at SSRN: https://ssrn.com/abstract=1076610

Franziska Ohnsorge

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Daniel Trefler (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-4190 (Phone)
416-978-6713 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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