Helpman, ElhananItskhoki, OlegRedding, Stephen2016-02-232010Helpman, Elhanan, Oleg Itskhoki, and Stephen Redding. 2010. Inequality and unemployment in a global economy. Econometrica 78: 1239–1283. doi: 10.3982/ECTA86401468-0262http://nrs.harvard.edu/urn-3:HUL.InstRepos:25586656This 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.en-USwage inequalityinternational traderiskunemploymentJournal Article2014-11-07Elhanan Helpman, Oleg Itskhoki, and Stephen Redding2016-02-2310.3982/ECTA8640