TY - JOUR
T1 - Internal geography, labor mobility, and the distributional impacts of trade
AU - Fan, Jingting
N1 - Funding Information:
* Pennsylvania State University, 607 Kern Building, University Park, PA 16802 (email: jxf524@psu.edu). Virgiliu Midrigan was coeditor for this article. I am grateful to Nuno Limao for his continuous guidance and support and to Rafael Dix-Carneiro for extensive discussions and in-depth comments at various stages of this project. For helpful comments, I also thank Marisol Chatruc, Kerem Cosar, Lorenzo Caliendo, Pablo D’Erasmo, Jonathan Eaton, Wenlan Luo, Peter Morrow, Felipe Saffie, Lixin Tang, and numerous conference and seminar participants. The financial support from the University of Maryland Graduate School Summer Research Fellowship is gratefully acknowledged.
Publisher Copyright:
© 2019 American Economic Association.
PY - 2019/7/1
Y1 - 2019/7/1
N2 - I develop a spatial-equilibrium model to quantify the distributional impacts of international trade in an economy with intranational trade and migration costs. Focusing on China, I find that international trade increases both between-region inequality among workers with similar skills and within-region inequality between skilled and unskilled workers, with the former accounting for 75 percent of the overall inequality increase. Ignoring spatial frictions will underestimate trade's impact on the overall inequality and overestimate its impact on the aggregate skill premium. I further study how internal trade and Hukou reforms affect the domestic economy and the impacts of international trade.
AB - I develop a spatial-equilibrium model to quantify the distributional impacts of international trade in an economy with intranational trade and migration costs. Focusing on China, I find that international trade increases both between-region inequality among workers with similar skills and within-region inequality between skilled and unskilled workers, with the former accounting for 75 percent of the overall inequality increase. Ignoring spatial frictions will underestimate trade's impact on the overall inequality and overestimate its impact on the aggregate skill premium. I further study how internal trade and Hukou reforms affect the domestic economy and the impacts of international trade.
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U2 - 10.1257/mac.20150055
DO - 10.1257/mac.20150055
M3 - Article
AN - SCOPUS:85065088704
SN - 1945-7707
VL - 11
SP - 252
EP - 288
JO - American Economic Journal: Macroeconomics
JF - American Economic Journal: Macroeconomics
IS - 3
ER -