Cemile Yavas

Trade with Labor Market Distortions and Heterogeneous Labor: Why Trade Can Hurt

This paper explains the differential impacts of trade on countries in terms of institutional differences which result in factor market distortions. We modify the Ricardian, Specific Factor and Hecksher Ohlin models of trade to capture these. Trade has both terms of trade effects and output effects. Both work to raise welfare in an undistorted economy. In a distorted economy, price effects work to improve welfare, while output effects work to reduce it. Large distorted countries are more likely to lose from trade as beneficial price effects are lower. In addition the greater the substitutability between goods, the more likely it is that welfare rises through trade.

Better luck next time: Learning through retaking

This paper provides some evidence that repeat taking of competitive exams may reduce the impact of background disadvantages on educational outcomes. Using administra- tive data on the university entrance exam in Turkey, the paper estimates cumulative learning between the first and the nth attempt while controlling for selection into re- taking in terms of observed and unobserved characteristics. Large learning gains mea- sured in terms of improvements in the exam scores are found, especially among less advantaged students.