Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145169 
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers No. 10035
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
We study how the skill distribution for an economy responds to changes in the skill premium induced by trade integration. Using administrative data for Denmark (1993- 2012) and Portugal (1993-2011), we conduct a two-step analysis. In the first step we predict the skill premium changes which are triggered by exogenous trade shocks. In the second step we estimate the impact of such changes on the skill distribution. The main results for Denmark show that both the average and the standard deviation of skills increase as a result of trade integration. For Portugal we find instead that the impact of trade mediated by skill premium changes is negligible and not statistically significant. We provide a theoretical intuition to rationalize both sets of results.
Subjects: 
labor market frictions
trade integration
skill upgrading
skill premium
JEL: 
F16
J24
Document Type: 
Working Paper

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