یک مدل تعادل عمومی با صنایع متفاوت عمودی، نیروی کار ماهر و تجارت

We present a simple general equilibrium model where one industry is oligopolistic and vertically differentiated. The manufacturing of products of a higher quality requires the employment of a larger amount of skilled labour. Given an underlying skills distribution, the model determines profits, wages and aggregate income and welfare. Results show that increasing skills endowments typically benefits the whole economy due to product quality increases and quality-adjusted price decreases. When trade opening leads to exports of the quality good, aggregate welfare increases but unskilled wage earners lose. The effects of labour taxation depend crucially on the existence of trade.

Standard general equilibrium analysis is cast in a perfectly competitive framework, thus neglecting important features of modern industries. Giant corporations are hardly price-takers. Competition in technologically-advanced sectors does not only take place in prices, but also in all those factors that affect the level of product quality perceived by consumers (R&D, advertisement…). The profits accruing to some industries are a non-negligible part of national income. From a dynamic perspective, they form the incentives for investment and innovation. Perfectly competitive models miss also important aspects of current trade flows among developed countries. A large and increasing share of modern international trade takes place in differentiated goods belonging to the same sector, but perfect competition is not consistent with the observed firms' incentives to differentiate their products. Hence, a useful model to analyse economy-wide effects of endowments with skilled labour, trade opening, or taxation should be a general equilibrium one, but it should also incorporate imperfectly competitive features that are commonly disregarded in standard models. In this paper, we develop a simple general equilibrium model to analyse the relation between some features of the labour market and the performance of a vertically differentiated, oligopolistic industry operating in an open-economy environment. There are several reasons that lead us to focus on vertical differentiation. First, vertical differentiation models permit us to capture a crucial dimension of the competitiveness of advanced industries, namely, product quality, allowing for a convenient modelling of quality competition. Second, recent empirical evidence shows that vertical differentiation is at the heart of current developments of intra-European trade. European intra-industry trade (IIT) in vertically differentiated goods has increased significantly during the last decade, while IIT in horizontally differentiated varieties has been stagnating.4 Empirical evidence also shows that differences in factor endowments are positively related with the share of IIT in vertically differentiated goods across European countries.5 This leads to the presumption that the market determinants of vertically differentiated industries are to be studied in a general equilibrium framework, something that is missing in standard imperfectly competitive models.6 Empirical research indicates that the availability of skilled labour within a country influences the level of product qualities and the resulting international market position of domestic industries.7 Consistently, we assume in our model that producing higher quality products requires a higher amount of skilled labour.8 In order to analyse currently debated issues concerning labour taxation, we also allow for the presence of taxes on labour and the redistribution of resulting revenues to consumers by the government.9 Firms in the vertically differentiated sector are oligopolistic and decide about prices and product qualities in a two-stage industry game. Given an underlying skills distribution, the model determines the allocation of labour, the distribution of income, as well as the quality and prices of the goods produced in the oligopolistic sector. In such a framework, contrary to standard models of vertically differentiated oligopolies, firms' demand functions can only be determined at equilibrium, together with labour allocation and consumers' income. Therefore, firms' conjectures about their own demand functions when setting prices and product qualities must prove to be consistent with equilibrium values, a requirement that is absent in partial equilibrium models. Because of non-linearities, an explicit solution of the model is not possible, and simulations are necessary. The model is used to examine the effects of changes in the endowment of labour skills and of changes in non-wage labour costs on firms' prices, product qualities, profits, income and overall welfare. Results show that increased skills endowments in the economy typically lead to a reduction in price–quality ratios, increased profits, and increased overall welfare. Since prices per quality fall also relative to skilled wage income, purchasing power increases. Both trade opening and a reduction in labour taxes may lead to similarly positive aggregate results but do affect different groups in the economy differently. In the case of taxation, some major effects depend crucially on the openness of the economy. The remainder of the paper is organised as follows. Section 2 develops the model and presents its main analytical properties. Section 3 reviews and discusses the results of the simulations. Section 4 concludes

In this paper, we develop a simple general equilibrium model to analyse the trade-off between labour costs and firms' profitability. The model considers a vertically differentiated oligopolistic industry, where firms compete both in prices and in the quality level of their products. This captures basic features of advanced industrial sectors, where R&D, advertisement and product development are important dimensions along which competition is evolving. The general equilibrium structure of the model allows building a link between product quality and factor endowments that is missing in partial equilibrium models with imperfect competition. Consistently with empirical evidence, we assume that higher product quality requires the employment of a higher amount of skilled labour. In the model, we distinguish between wages and labour taxes as different components of labour costs. So, there is one component (the wage rate) that is endogenous to the model, and another (taxes) that is a policy variable. Solving the model through simulations we show, first, that an increase in skills endowment hardly changes employment patterns (in terms of workers employed) though effective skill use in the imperfectly competitive industry increases. The additional skills endowment is used for quality upgrades. The gains from these upgrades are partially passed on to consumers through decreases in price per quality. Consequently, employment and production in the perfectly competitive sector hardly change. Second we show, that trade opening leads to gains from trade due increased profits from exports and increased consumption opportunities from imports. Aggregate income and utility unambiguously increase. However, workers in the import-competing industry may lose as a consequence of trade opening. Lastly, we show that the effect of taxation depends not only on its redistributive consequences but also on the existence of world markets. With taxation, income inequality is generally reduced. When taxes are fully redistributed at a flat rate per household, demand effects may dominate in a closed economy and income and welfare rise. In contrast in an open economy, cost effects may dominate leading to falling aggregate welfare. The model is very simple and the robustness properties of our results with respect to different model specifications are not yet fully established. Therefore, our exercise can as of yet only provide an incomplete guide for policy analysis. We believe, though, that some lessons can be learnt even by our simple exercise. First, it shows formally that including general equilibrium effects when studying the relation between labour costs and industry performance may have relevant consequences for policy prescriptions. Second, it shows that changes in factor endowments or relative factor prices affect the nature of international competition in imperfectly competitive industries. This in turn leads to additional effects beyond those that can be inferred from using a Heckscher–Ohlin or Specific-Factor framework of analysis. Several specific predictions about changes in relative wages, market shares, demand and prices may be investigated further in empirical research. We believe that the real potential of this modelling framework lies in applications to trade issues. The incorporation of a quality-differentiated goods sector allows for the analysis of vertical intra-industry trade within a general equilibrium trade framework. For example, the effects of trade opening on domestic profits in the imperfectly competitive sector will depend on where domestic exporters end up being situated on the international quality ladder. In this context, changes in labour taxation will have a strategic trade policy effect that can be studied using our model.