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  3. American Economic Review
  4. August 2012
  5. Skill Dispersion and Trade Flows

Skill Dispersion and Trade Flows

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Abstract

Is skill dispersion a source of comparative advantage? In this paper we use microdata from the International Adult Literacy Survey to show that the effect of skill dispersion on trade flows is quantitatively similar to that of the aggregate endowment of human capital. In particular we investigate, and find support for, the hypothesis that countries with a more dispersed skill distribution specialize in industries characterized by lower complementarity of workers' skills. The result is robust to the introduction of controls for alternative sources of comparative advantage, as well as to alternative measures of industry-level skill complementarity. (JEL F14, F16, J24, J31)

Citation

Bombardini, Matilde, Giovanni Gallipoli, and Germán Pupato. 2012. "Skill Dispersion and Trade Flows." American Economic Review, 102 (5): 2327-48. DOI: 10.1257/aer.102.5.2327

Additional Materials

JEL Classification

  • F14 Country and Industry Studies of Trade
  • F16 Trade and Labor Market Interactions
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials