Working Paper No. 1249

Globalization, the Jobs Ladder and Economic Mobility

Published: November 19, 2018, revised July 2019 and February 2020Pages: 44Keywords: Job Ladders; Globalization; Wages; Inequality; ExportJEL-codes: F10; F20; J30
Published version

Globalization, the Jobs Ladder and Economic Mobility 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 ladder and less time spent in entry level jobs.

 

 

Fredrik Heyman

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fredrik.heyman@ifn.se

Fredrik Sjöholm

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Ph: +46 (8) 665 4502
fredrik.sjoholm@ifn.se

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