The robust empirical finding that exporting firms are systematically different from firms thatmerely serve domestic consumers has inspired the development of a new brand of tradetheory, the theory of heterogeneous firms and trade. The establishment of a canonical modeldue to Melitz (2003) has...

This paper considers a labour market model of monopsonistic competition with taste-based discrimination against minority workers to study the effect of equal pay legislation on labour market inequality. When the taste for discrimination is small or competition is weak, the policy removes job...

We use unique plant-level data to study the link between the local availability of services and the decision of manufacturing firms to source materials from abroad. To guide our empirical analysis we develop a monopolistic-competition model of the materials sourcing decisions of heterogeneous...

We consider a labour market model of oligopsonistic wage competition and show that there is a holdup problem although workers do not have any bargaining power. When a firm invests more, it pays a higher wage in order to attract workers from competitors. Because workers participate in the returns...

This paper provides a novel microeconomic foundation for pecuniary human capital externalities in a labor market model of monopsonistic competition. Multiple equilibria arise because of a strategic complementarity in investment decisions

We develop a new general equilibrium model of trade with heterogeneous firms, variable demand elasticities and endogenously determined wages. Trade integration favors wage convergence, intensifies competition, and forces the least efficient firms to leave the market, thereby affecting aggregate...

This paper brings together the modern research on employer power and employee power by empirically examining the effects of unionization on worker earnings, employment, and inequality across differently concentrated markets. Exploiting national tax reforms to union membership dues as exogenous...

There are large spatial disparities in unemployment durations across the 1,300 municipalitiesin the Ile-de-France region (Paris Greater Area). In order to characterize these imbalances,we estimate a proportional hazard model stratified by municipality on an exhaustive datasetof all unemployment...

This paper analyzes the factors underlying the evolution of the worldwide distribution of skills and their implications for global inequality. We develop and parameterize a two-sector, two-class, world economy model that endogenizes education and mobility decisions, population growth, and income...

The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction...