Working Paper No. 1249

Globalization and the Jobs Ladder

Published: November 19, 2018, revised July 2019Pages: 56Keywords: Job Ladders; Globalization; Wages; Inequality; ExportJEL-codes: F10; F20; J30

Globalization and the Jobs Ladder Carl Davidson, Fredrik Heyman, Steven Matusz, Fredrik Sjöholm and Susan Chun Zhu


Globalization affects the mix of jobs available in an economy and the rate at which workers gain skills. We develop a model in which firms differ in terms of productivity and workers differ in skills, and use the model to examine how globalization affects the wage distribution and the career path of workers as they move up the jobs ladder. We calibrate the model using many of the same parameters and targeting the same moments of the US economy as Melitz and Redding (2015) and then investigate the impact of globalization. Our results indicate that although falling trade costs results in greater wage inequality, it also leads to a wider path up the jobs ladders and less time spent in entry level jobs. The key assumptions and predictions are confirmed in data on recruitments and job mobility in Sweden.

 

 

Fredrik Heyman

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Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Fredrik Sjöholm

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Ph: +46 46 222 74 26
fredrik.sjoholm@nek.l...

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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