Skill Acquisition, Credit Constraints, and Trade

38 Pages Posted: 17 Jul 2006

See all articles by Tatyana Chesnokova

Tatyana Chesnokova

University of Auckland - Department of Economics

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2006

Abstract

This paper looks at the effect of credit constraints on skill acquisition when agents have heterogeneous abilities and wealth. We use a two factor general equilibrium model and assume credit markets are absent. We explore the effects of trade on factor earnings as well as the evolution of the distribution of income in small and large economies. Our work suggests that developed countries need to ensure access to education when liberalizing trade to ensure they reap the potential gains from trade.

Keywords: Credit constraints, endogenous skill formation, apprenticeship

JEL Classification: F16, O15, O16

Suggested Citation

Chesnokova, Tatyana and Krishna, Kala, Skill Acquisition, Credit Constraints, and Trade (June 2006). Available at SSRN: https://ssrn.com/abstract=917119 or http://dx.doi.org/10.2139/ssrn.917119

Tatyana Chesnokova (Contact Author)

University of Auckland - Department of Economics ( email )

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Auckland
New Zealand

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

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United States
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National Bureau of Economic Research (NBER)

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