Trade Induced Skill Upgrading: Lessons from the Danish and Portuguese Experiences

62 Pages Posted: 18 Jul 2016

See all articles by Grace Weishi Gu

Grace Weishi Gu

University of California, Santa Cruz - Department of Economics

Samreen Malik

New York University (NYU) - New York University Abu Dhabi

Dario Pozzoli

Aarhus University - School of Business and Social Sciences

Vera Rocha

Copenhagen Business School

Abstract

We study how the skill distribution for an economy responds to changes in the skill premium induced by trade integration. Using administrative data for Denmark (1993- 2012) and Portugal (1993-2011), we conduct a two-step analysis. In the first step we predict the skill premium changes which are triggered by exogenous trade shocks. In the second step we estimate the impact of such changes on the skill distribution. The main results for Denmark show that both the average and the standard deviation of skills increase as a result of trade integration. For Portugal we find instead that the impact of trade mediated by skill premium changes is negligible and not statistically significant. We provide a theoretical intuition to rationalize both sets of results.

Keywords: labor market frictions, trade integration, skill upgrading, skill premium

JEL Classification: F16, J24

Suggested Citation

Steadmon, Weishi and Malik, Samreen and Pozzoli, Dario and Rocha, Vera, Trade Induced Skill Upgrading: Lessons from the Danish and Portuguese Experiences. IZA Discussion Paper No. 10035, Available at SSRN: https://ssrn.com/abstract=2810426 or http://dx.doi.org/10.2139/ssrn.2810426

Weishi Steadmon (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States
+1 (831) 459-4791 (Phone)

HOME PAGE: http://https://sites.google.com/site/graceweishigu/home

Samreen Malik

New York University (NYU) - New York University Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

HOME PAGE: http://samreenmalik.net

Dario Pozzoli

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Vera Rocha

Copenhagen Business School ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
24
Abstract Views
343
PlumX Metrics