Skills Scarcity and Export Intensity

48 Pages Posted: 14 Oct 2019

See all articles by Carlo Perroni

Carlo Perroni

University of Warwick - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Davide Suverato

Ludwig Maximilian University of Munich (LMU)

Date Written: 2019

Abstract

We describe a model of trade with input based product differentiation and non-proportional trade costs that is capable of predicting a positive correlation between firms' export intensity, the price of their exports, and the wages they pay to their workers. These correlations arise in the model solely from comparative input scarcity and independently of any productivity differentials: in equilibrium, firms that employ workers with comparatively scarcer skills, other things equal, export a larger proportion of their output, pay higher wages and charge higher prices.

Keywords: export intensity and wages, input based product differentiation

JEL Classification: F120, F160, E240

Suggested Citation

Perroni, Carlo and Suverato, Davide, Skills Scarcity and Export Intensity (2019). CESifo Working Paper No. 7787. Available at SSRN: https://ssrn.com/abstract=3468016

Carlo Perroni (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
44 24 7652 8416 (Phone)
44 24 7652 3032 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Davide Suverato

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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