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Helpman, Elhanan

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Helpman

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Elhanan

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Helpman, Elhanan
Author's Publications: search.filters.isAuthorOfPublication.59ac4316-2fd0-4b15-91f6-80360fae3c69

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Now showing 1 - 10 of 22
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    Competing for Endorsements
    (1998-05) Grossman, Gene M; Helpman, Elhanan
    Endorsements are a simple language for communication between interest-group leaders and group members. The members, who share policy concerns, may not perfectly understand where their interests lie on certain issues. If their leaders cannot fully explain the issues, they can convey some information by endorsing a candidate or party. When interest groups endorse legislative contenders, the candidates may compete for backing. Policies may favor special interests at the expense of the general public. We examine the conditions under which parties compete for endorsements, the extent to which policy outcomes are skewed, and the normative properties of the political equilibria.
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    Foreign Trade and Investment: Firm-level Perspectives
    (Wiley-Blackwell, 2013) Helpman, Elhanan
    This Economica Coase Lecture reviews research that has revolutionized the field of international trade and foreign direct investment. It explains the motivation behind the development of new analytical frameworks, the nature of these frameworks, and the empirical studies that sprouted from them.
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    Sources of Wage Inequality
    (American Economic Association, 2013) Akerman, Anders; Helpman, Elhanan; Itskhoki, Oleg; Muendler, Marc-Andreas; Redding, Stephen
    Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.
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    Income Distribution, Product Quality, and International Trade
    (University of Chicago Press, 2011) Fajgelbaum, Pablo; Grossman, Gene; Helpman, Elhanan
    We develop a framework for studying trade in vertically and horizontally differentiated products. In our model, consumers with heterogeneous incomes and tastes purchase a homogeneous good as well as making a discrete choice of quality and variety of a differentiated product. The distribution of preferences in the population generates a nested logit demand structure. These demands are such that the fraction of consumers who buy a higher-quality product rises with income. We use the model to study the pattern of trade between countries that differ in size and income distributions but are otherwise identical. Trade―which is driven primarily by demand factors―derives from "home market effects" in the presence of transport costs. The model helps to explain why richer countries export higher-quality goods. It provides a tractable tool for studying the welfare consequences of trade, transport costs, and trade policy for different income groups in an economy.
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    Inequality and Unemployment in a Global Economy
    (Econometric Society, 2010) Helpman, Elhanan; Itskhoki, Oleg; Redding, Stephen
    This paper develops a new framework for examining the determinants of wage distributions that emphasizes within-industry reallocation, labor market frictions, and differences in workforce composition across firms. More productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity. The opening of trade enhances wage inequality and can either raise or reduce unemployment. While wage inequality is higher in a trade equilibrium than in autarky, gradual trade liberalization first increases and later decreases inequality.
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    Labour Market Rigidities, Trade and Unemployment
    (Oxford University Press (OUP), 2010) Helpman, Elhanan; Itskhoki, Oleg
    We study a two-country two-sector model of international trade in which one sector produces homogeneous products while the other produces differentiated products. The differentiated-product industry has firm heterogeneity, monopolistic competition, search and matching in its labor market, and wage bargaining. Some of the workers searching for jobs end up being unemployed. Countries are similar except for frictions in their labor markets. We study the interaction of labor market rigidities and trade impediments in shaping welfare, trade flows, productivity, price levels and unemployment rates. We show that both countries gain from trade but that the flexible country -- which has lower labor market frictions -- gains proportionately more. A flexible labor market confers comparative advantage; the flexible country exports differentiated products on net. A country benefits by lowering frictions in its labor market, but this harms the country's trade partner. And the simultaneous proportional lowering of labor market frictions in both countries benefits both of them. The model generates rich patterns of unemployment. Specifically, trade integration -- which benefits both countries -- may raise their rates of unemployment. Moreover, differences in rates of unemployment do not necessarily reflect differences in labor market rigidities; the rate of unemployment can be higher or lower in the flexible country. Finally, we show that the flexible country has both higher total factor productivity and a lower price level, which operates against the standard Balassa-Samuelson effect.
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    Outsourcing in a Global Economy
    (Oxford University Press (OUP), 2005) Grossman, Gene M.; Helpman, Elhanan
    We study the determinants of the location of sub-contracted activity in a general equilibrium model of outsourcing and trade. We model outsourcing as an activity that requires search for a partner and relationship-specific investments that are governed by incomplete contracts. The extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers, the relative cost of searching in each market, the relative cost of customizing inputs, and the nature of the contracting environment in each country.
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    Growth, Trade, and Inequality
    (2014) Grossman, Gene; Helpman, Elhanan
    We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated product and a random technology for producing it. Technologies differ in complexity and productivity, and technological sophistication is complementary to worker ability. We study the co-determination of growth and income inequality in both the closed and open economy, as well as the spillover effects of policy and conditions in one country to outcomes in others.
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    Matching, Sorting, and the Distributional Effects of International Trade
    (University of Chicago Press, 2017) Grossman, Gene; Helpman, Elhanan; Kircher, Philipp
    We study the distributional consequences of trade in a world with two industries and two heterogeneous factors of production. Productivity in each production unit reflects the ability of the manager and the abilities of the workers, with complementarity between the two. We begin by examining the forces that govern the sorting of worker and manager types to industries, and the matching of workers and managers within industries. We then consider how changes in relative output prices generated by changes in the trading environment affect sorting, matching, and the distributions of wages and salaries. We distinguish three mechanisms that govern the effects of trade on income distribution: trade increases demand for all types of the factor used intensively in the export sector; trade benefits those types of a factor that have a comparative advantage in the export sector; and trade induces a re-matching of workers and managers within both sectors, which benefits the more able types of the factor that achieves improved matches.
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    Trade and Inequality: From Theory to Estimation
    (Oxford University Press (OUP), 2016-06-29) Helpman, Elhanan; Itskhoki, Oleg; Muendler, Marc-Andreas; Redding, Stephen
    While neoclassical theory emphasizes the impact of trade on wage inequality between occupations and sectors, more recent theories of rm heterogeneity point to the impact of trade on wage dispersion within occupations and sectors. Using linked employer-employee data for Brazil, we show that much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics; this within component is driven by wage dispersion between fi rms; and wage dispersion between firms is related to rm employment size and trade participation. We then extend the heterogenous- rm model of trade and inequality from Helpman, Itskhoki, and Redding (2010) and estimate it with Brazilian data. We show that the estimated model provides a close approximation to the observed distribution of wages and employment. We use the estimated model to undertake counterfactuals, in which we nd sizable e ects of trade on wage inequality.