TY  - JOUR
AU  - Artuç,Erhan
AU  - McLaren,John
TI  - Trade Policy and Wage Inequality: A Structural Analysis with Occupational and Sectoral Mobility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18503
PY  - 2012
Y2  - November 2012
UR  - http://www.nber.org/papers/w18503
L1  - http://www.nber.org/papers/w18503.pdf
N1  - Author contact info:
Erhan Artuc
The World Bank
1818 H Street NW
Mailstop: MC 3-303
Washngton DC, 20433
Tel: 202-4584742
E-Mail: eartuc@worldbank.org

John McLaren
Department of Economics
University of Virginia
P.O. Box 400182
Charlottesville, VA  22904-4182
Tel: 434/924-3994
Fax: 434/982-2904
E-Mail: jmclaren@virginia.edu
AB  - A number of authors have argued that a worker's occupation of employment is at least as important as the worker's industry of employment in determining whether the worker will be hurt or helped by international trade.  We investigate the role of occupational mobility on the effects of trade shocks on wage inequality in a dynamic, structural econometric model of worker adjustment. Each worker in our specification can switch either industry, occupation, or both, paying a time-varying cost to do so in a rational-expectations optimizing environment. We find that the costs of switching industry and occupation are both high, and of similar magnitude, but in simulations we find that a worker's industry of employment is much more important than either the worker's occupation or skill class in determining whether or not she is harmed by a trade shock.
ER  -