Dynamic Trade, Education and Intergenerational Inequality
Open Access
- Author:
- Yang, Chung Han
- Graduate Program:
- Economics
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- April 17, 2019
- Committee Members:
- Jonathan Eaton, Dissertation Advisor/Co-Advisor
Jonathan Eaton, Committee Chair/Co-Chair
Stephen Yeaple, Committee Member
Kim Ruhl, Committee Member
Yizao Liu, Outside Member - Keywords:
- international trade
inequality - Abstract:
- To what extent does education alleviate income inequality between skilled and unskilled workers induced by globalization? What are the corresponding intergenerational welfare implications? This paper presents a multi-country dynamic general equilibrium framework to investigate these questions. In this model, interactions between comparative advantage, capital accumulation, and endogenous education are the main driving forces of the transitional path. The flexibility to adjust supply in different factors determines the inequality in different stages of economic transition. I use the World Input-Output Database to quantify the key features of the model for 40 countries and 6 industries. For trade liberalization counterfactual, I find that (1) the skill premium and educational attainment increase for all countries in a steady state; (2) income inequality between education categories is more severe in the short run than in the long run; (3) education reduces 65\% of trade-induced inequality; and (4) the gains from trade are unevenly distributed across generations and educational categories --- as older and educated workers gain the most, and old and uneducated workers gain the least.