TY  - JOUR
AU  - Eeckhout,Jan
AU  - Jovanovic,Boyan
TI  - Occupational Choice and Development
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13686
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13686
L1  - http://www.nber.org/papers/w13686.pdf
N1  - Author contact info:
Jan Eeckhout
Department of Economics
University of Pennsylvania
Philadelphia, PA  19104
E-Mail: eeckhout@ssc.upenn.edu

Boyan Jovanovic
New York University
Department of Economics
19 W. 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8953
Fax: 212/995-4186
E-Mail: Boyan.Jovanovic@nyu.edu
AB  - The rise in world trade since 1970 has raised international mobility of labor services. We study the effect of such a globalization of the world's labor markets. We find that when people can choose between wage work and managerial work, the output gains are U-shaped: A worldwide labor market raises output by more in the rich and the poor countries, and by less in the middle-income countries. This is because the middle-income countries experience the smallest change in the factor-price ratio, and where the option to choose between wage work and managerial work has the least value in the integrated economy. Our theory also establishes that after economic integration, the high skill countries see a disproportionate increase in managerial occupations. Using aggregate data on GDP, openness and occupations from 115 countries, we find evidence for these patterns of occupational choice. 
ER  -