Occupational Choice, Aggregate Productivity, and Trade

10 Pages Posted: 18 Jul 2013

See all articles by Jürgen Meckl

Jürgen Meckl

University of Konstanz; IZA Institute of Labor Economics

Benjamin Weigert

University of Giessen - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2013

Abstract

We propose occupational decisions of heterogeneous individuals as an alternative mechanism of explaining the distribution of firm productivities emphasized by empirical studies. Thus, we integrate the frameworks of Melitz (Econometrica 71 (2003):1695–725), and of Manasse and Turrini (Journal of International Economics 54 (2001):97–117) that establish the theoretical base of trade models with heterogeneous firms. Our model is technically much simpler than the Melitz approach while preserving the main results on firm‐selection effects caused by international market integration. Our approach paves the way for detailed analysis of institutions in a heterogeneous firm model to better understand the link between institutions and an economy's productivity distribution.

Suggested Citation

Meckl, Jürgen and Weigert, Benjamin, Occupational Choice, Aggregate Productivity, and Trade (August 2013). Review of Development Economics - Special Issue. Guest Editor: Zhihao Yu, Vol. 17, Issue 3, pp. 549-558, 2013, Available at SSRN: https://ssrn.com/abstract=2295282 or http://dx.doi.org/10.1111/rode.12049

Jürgen Meckl (Contact Author)

University of Konstanz ( email )

Fach D-144
Universitätsstraße 10
Konstanz, D-78457
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Benjamin Weigert

University of Giessen - Department of Economics ( email )

Licher Str. 62
Giessen, Hessen D-35394
Germany

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