Marco de Pinto

International Trade and Unemployment: The Worker-Selection Effect

This paper analyzes how trade liberalization influences the unemployment rate of workers with different abilities. We refine the Melitz (2003) framework to account for trade unions and heterogeneous workers, who differ with respect to their abilities. Our main ?findings are: (i) high ability workers profit from trade liberalization in terms of higher wages and higher employment; (ii) the least efficient workers loose their job and switch to long-term unemployment (worker-selection effect); (iii) if a country is endowed with a large fraction of low-skilled workers, trade liberalization leads to a rise in aggregate unemployment. In this case, trade liberalization may harm a countrys welfare.

The Impact of Unionization Structures with Heterogeneous Firms and Rent-Sharing Motives

How are unemployment and output affected if wages are set on the sector level rather than firm level? We take a new look at this question, allowing for heterogeneous firms and rent‐sharing motives. Without these motives, employment and output are lower under sector‐level wage‐setting due to higher wage markups. With rent‐sharing motives, however, firm selection is higher under sector‐level wage‐setting, which tends to increase employment and output, thus counteracting the markup effect. Simulations show that the firm‐selection effect decreases the difference between the two unionization structures substantially but it does not change the signs of the effects on output and employment.

Redistribution of Trade Gains in the Presence of Firm and Worker Heterogeneity

Trade gains are unequally distributed; in particular, low�?ability workers lose out in terms of wages and employment probability. In this paper, we investigate the impact of redistribution schemes on aggregate and disaggregate variables. To this end, we built a trade model with trade unions, heterogeneous firms and workers. Three redistribution schemes are distinguished: unemployment benefits financed by either a wage tax, a payroll tax or a profit tax. We find that: (i) all three redistribution schemes reduce output per capita; (ii) but the marginal reduction is lowest in the wage tax funding scenario; and (iii) If the profit tax is used, labour demand for low�?ability workers increases.

Unemployment Benefits as Redistribution Scheme for Trade Gains: A Positive Analysis

Trade liberalization is no Pareto-improvement - there are winners (high-skilled) and losers (low-skilled). To compensate the losers the government is assumed to introduce unemployment benefits (UB). These benefits are financed by either a wage tax, a payroll tax, or a profit tax. Using a Melitz-type model of international trade with unionized labour markets and heterogeneous workers we show that: (i) UB financed by a wage tax reduce aggregate employment but increase welfare measured by per capita output. (ii) UB financed by a payroll tax reduce aggregate employment and welfare. If UB exceeds a well-defined threshold, the trade gains will be completely destroyed. (iii) UB financed by a profit tax reduce the unemployment rate of the low-skilled, but also reduces welfare. The threshold for the level of UB, where the trade gains are destroyed by the redistribution scheme, is higher compared to the case of a payroll tax.

Selecting successful students? Undergraduate grades as an admission criterion

ABSTRACT In Europe’s reformed education system, universities may be forced by law to consider undergraduate grade point average (UGPA) as the primary admission criterion in the selection of graduate students. In this article, we investigate whether UGPA predicts graduate student performance in order to discuss its usefulness as an admission criterion. In our theoretical framework, we show that undergraduate students may choose slower study progress in favour of receiving higher grades and conclude that UGPA is a relatively good (weak) predictor for graduate grade point average (study progress). Having data from a cohort of students whose selection was in clear conflict with the legal requirement, we empirically confirm our theoretical predictions by exploiting a unique opportunity for assessing educational policies. Discussion of our findings leads to some important conclusions concerning the Bologna reforms and the lawmakers’ idea of giving some independence to universities, but not too much of it.

An Optimal Redistribution Scheme for Trade Gains

Recent empirical studies, e.g. by Amiti and Davis (2012) and Goldberg and Pavcnik (2007), confirm that trade liberalization is attended by rising income inequality. Scheve and Slaughter (2007) as well as the OECD (2008) argue that these distributional issues are critical because they raise resistance to free trade and so policy makers might be forced to increase the degree of protectionism.

Wodurch wird die Lohnelastizität der Arbeitsnachfrage bestimmt? - Die vier Hicks-Marshall-Regeln

Ist die Arbeitsnachfragekurve eher steil oder eher flach? Die diesbezuglichen Uberlegungen von John Hicks (1932) und Alfred Marshall (1920) haben nichts an Aktualitat verloren. Ihre vier „Gesetze der Nachfrage“ sind nach wie vor Ausgangspunkt vieler Studien zur Theorie und Empirie der Arbeitsnachfrage. Ziel dieses Beitrags ist es, analytische Herleitung und okonomische Intuition der Hicks-Marshall-Regeln miteinander zu verknupfen.