In this paper we contribute to the understanding of how decisions about education
and labor market participation interact with international economic integration. Individuals
are heterogenous in their skills and trade occurs between sectors characterized by
oligopolistic competition. Within this setting, individuals decide on their type of education
and on labor market participation subject to the degree of international integration
as well as education subsidies and unemployment benefits provided by the government.
We derive the impact of various policy changes on education and labor markets, e.g. that
the effects of productivity shocks are amplified by trade integration. In an extension with
endogenous firm entry, the effectiveness of home education subsidies decreases in economic
integration and increases in foreign education subsidies. This allows for policy coordinations
mitigating adverse effects of trade integration.
Dieser Eintrag ist Teil der Universitätsbibliographie.
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