Publication

The authors in this paper develop and utilize a model of trade and education to show the effect of trade liberalization on skill acquisition. They contend that freer trade can cause the simultaneous crowding out of the middle occupations towards the skill acquisition extremes in one country and the expansion of middle skill occupations in another country. The authors find that targeted education subsidies are more effective than tariffs as a means to preserve "middle class" jobs, while uniform educational subsidies have no effect.