International Trade and Human Capital: A Simple General Equilibrium Model

Abstract

The paper incorporates the formation of human capital into the two-factor, two-good model of international trade. Workers can choose between being unskilled and earning the corresponding wage or obtaining an education that enables them to earn a higher wage. The wages of skilled and unskilled labor and the direct and indirect costs of education are all determined endogenously, along with the terms of trade and the pattern of comparative advantage. The implications of the model are consistent with the extensive empirical research on the role of human capital in explaining patterns of comparative advantage.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 294 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.