We provide a framework with multiple worker types (e.g. gender, age, education) to decompose changes in aggregated and disaggregated measures of between-group inequality into changes in (i) the composition of the workforce across labor types, (ii) the importance of different tasks, (iii) the extent of computerization, and (iv) other labor-specific productivities (a residual to match observed relative wages). The model features three forms of comparative advantage: between worker types and equipment types, worker types and tasks, and equipment types and tasks. We parameterize the model to match observed changes in worker type allocations (across equipment types and tasks) and wages in the United States between 1984 and 2003. The combination of changes in the importance of tasks and computerization explains more than half of the rise in the skill premium and the rise in inequality across more disaggregated education types as well as almost half the rise in the relative wage of women.

This Version: May 2015 (Please contact us for the latest version if you plan to cite the paper) In this paper we study costs of goods and labour flows as a soure of labour mis-allocation both across regions and across firms and sectors within a region. We de-velop a general equilibrium model of internal and external trade with worker selection across locations and costs to both trade and migration. We estimate these costs using unique data on China’s trade and migration and quantify the aggregate productivity and welfare losses generated by these frictions. The costs were high in the early 2000s, but declined afterwards. We quantify the consequences of these declines and find the reduction in trade and migration costs accounts for 36 % of China’s aggregate GDP growth between 2002 and 2007. We also find that reduction in internal trade costs and migration costs dominate external trade liberalization as a source of aggre-gate productivity growth and welfare gains between 2002 and 2007. Finally, despite some decline, migration cost in China are still very high and China would see very

Abstract We explore the effects of international trade on employment and wage growth of differentsized towns within a country. A multi-region model of intra-national adjustment predicts that small towns have more elastic labor-force responses to trade liberalization. We test this prediction in fine-grained regional data for Austria, using the fall of the Iron Curtain as a quasi-experimental setting for the exploration of trade-induced spatial effects. We find improved access to foreign markets to boost both employment and nominal wages, but large towns tend to have larger wage responses and smaller employment responses than small towns. In terms of aggregate income responses, the two effects cancel out: we find no statistically significant differences in the effects of trade liberalization on the wage bills of small and large towns. The welfare gains of immobile factors are estimated to be 40% higher in border towns than in interior towns. JEL Classification: F15, R11, R12

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Trade dynamics with sector-specific human

We study the effects of changes in trade openness on wages and employment of different-sized towns. To this end, we develop a multi-region model of intra-national adjustment to trade shocks. In equilibrium, small towns have more elastic labor-force responses than large towns. We test this prediction using fine-grained regional data for Austria and the fall of the Iron Curtain as a quasi-experimental setting for the exploration of trade-induced spatial effects. We find improved access to foreign markets to boost both employment and nominal wages, but large towns tend to have larger wage responses and smaller employment responses than small towns. The welfare gains of immobile factors are estimated to be 40 % higher in border towns compared to interior towns. JEL Classification: F15, R11, R12

This paper investigates the distributional consequences of international trade shocks in the con-text of the Brazilian labor market. First, I document a new set of facts about how differential ex-posure to commodity price shocks across educational groups and regions leads to differential out-comes in terms of sectoral employment and wages. Second, I show that such facts are qualitatively consistent with a two-sector Roy model where worker heterogeneity regarding comparative and ab-solute advantage in sector-specific tasks determines the structure of employment and wages. Third, I establish that the schedules of comparative and absolute advantage are nonparametrically iden-tified from cross-regional variation in sectoral responses of employment and wages induced by sector demand shocks. Lastly, I build on this result to structurally estimate the model in the sample of Brazilian local labor markets. My structural estimates indicate that a 10 % decrease in commod-ity prices causes counterfactual increases of 1.2 % in the skill wage premium and of 5 % in wage dispersion. ∗Author contact information:

Even before the Great Recession, U.S. employment growth was unimpressive. Between 2000 and 2007, the economy gave back the considerable gains in employment rates it had achieved during the 1990s, with major contractions in manufacturing employment being a prime contrib-utor to the slump. The U.S. employment “sag ” of the 2000s is widely recognized but poorly understood. In this paper, we explore the contribution of the swift rise of import competition from China to sluggish U.S. employment growth. We find that the increase in U.S. imports from China, which accelerated after 2000, was a major force behind recent reductions in U.S. manufacturing employment and that, through input-output linkages and other general equi-librium effects, it appears to have significantly suppressed overall U.S. job growth. We apply industry-level and local labor market-level approaches to estimate the size of (a) employment losses in directly exposed manufacturing industries, (b) employment effects in indirectly exposed upstream and downstream industries inside and outside manufacturing, and (c) the net effects of conventional labor reallocation, which should raise employment in non-exposed sectors, and Keynesian multipliers, which should reduce employment in non-exposed sectors. Our central