International Trade and Earnings Inequality: A New Factor Content Approach / Rodrigo Adão, Paul Carrillo, Arnaud Costinot, Dave Donaldson, Dina Pomeranz.

Format:

Book

Author/Creator:

Adão, Rodrigo.

Contributor:

National Bureau of Economic Research.

Carrillo, Paul.

Costinot, Arnaud.

Donaldson, Dave.

Pomeranz, Dina.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28263.

NBER working paper series no. w28263

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We develop a new factor content approach to study the impact of trade on inequality. Our analysis generalizes the theoretical results of Deardorff and Staiger (1988) and improves on past empirical implementations of these results. Combined with unique administrative data from Ecuador, our approach yields measures of individual-level exposure to exports and imports, for both capital and labor income, as well as estimates of the incidence of such exposure across the income distribution. We find that international trade raises earnings inequality in Ecuador, especially in the upper-half of the income distribution. However, the drop in inequality experienced by Ecuador over the last decade would have been less pronounced in the absence of trade.

Notes:

Print version record

December 2020.