TY  - GEN
AB  - We illustrate a new source of comparative advantage that is generated by
countries’ different ability to adjust to technological change. Our model in-
troduces substitution of workers in codifiable (routine) tasks with more ef-
ficient machines, a process extensively documented in the labor literature,
into a canonical 2 × 2 × 2 Heckscher-Ohlin model. Our key hypothesis is
that labor reallocation across tasks is subject to frictions, the importance of
which varies by country. The arrival of capital-augmenting innovations trig-
gers the movement of workers out of routine tasks, and countries with low
labor market frictions become relatively abundant in non-routine labor. In
the new equilibrium, more flexible countries specialize in producing goods
that use non-routine labor more intensively. We document empirically that
the ranking of countries with respect to the routine intensity of their exports
is strongly related to labor market institutions and to cultural norms that
influence adjustment to technological change, such as risk aversion or long-
term orientation. The explanatory power of this mechanism for trade flows is
especially strong for intra-EU trade.
DA  - 2020
DO  - 10.4119/unibi/2942674
KW  - Comparative advantage
KW  - resource allocation
KW  - routine tasks
LA  - eng
PY  - 2020
SN  - 2196-2723
SP  - 61-
TI  - Comparative Advantage in (Non-)Routine Production
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-29426745
Y2  - 2024-11-22T12:49:29
ER  -