Essays in international trade and labor

This thesis comprises of three essays on the effects of labor mobility on local wages and on international child labor. The first essay examines the effects of relative factor supplies on relative factor prices and finds that state-specific changes in relative factor supplies significantly impact states' production techniques and their relative factor prices. These results imply that local relative factor supplies determine local relative factor prices across US states, and this suggests a failure of relative factor price equalization across US states. The second essay looks at the effects of changes in local labor supplies on the local wage distribution by measuring the elasticity of local wages to changes in the local supplies of various skill groups. The estimated elasticities are significantly different from zero, implying that changes in local labor supplies do impact the local wage distribution. Furthermore, the estimated cross-wage elasticities are significantly different from zero and are not symmetrical across skill groups, suggesting the presence of significant human capital spillovers. The third essay conducts a cross-national study of child labor in an attempt to isolate the factors that determine child labor rates across countries, and finds that the average child labor rate for a country rises with the size of the rural population, female labor force participation and fertility, whereas it falls with increases in GDP per capita, the share of public educational expenditures in gross national income, life expectancy and the share of the labor force in industry or agriculture (as opposed to services). Looking at changes over time, as GDP per capita rises and as trade expands, the child labor rate falls, whereas increases in the size of the rural population and in the female participation rate lead to increases in the child labor rate. The results in this essay suggest that the most effective ways to combat child labor are to increase GDP per capita, improve life expectancy, expand trade, increase spending on education and raise the GDP growth rate.