Author: Varan Kitayaporn

Publisher:

Published: 2023

Total Pages: 0

ISBN-13:

This dissertation discusses the relationship between international trade, the labor market, and educational attainment in Thailand. It focuses on two opposing effects of international trade on human capital investment. On the one hand, trade openness allows Thailand to leverage its comparative advantage and raise the incomes of workers in exporting sectors, increasing education affordability. On the other hand, specializing in exports of less-skill-intensive sectors reduces the returns to skill, disincentivizing educational attainment. In the first chapter, I use an overlapping generations household model with credit constraints to analyze these two effects and show how heterogeneity in household endowments can affect their relative strength. I also use household data to show empirically that the decrease in skill premium slightly dominates the income effect. Children from households with more export exposure are more likely to drop out of school, except for severely credit-constrained households where the income effect may dominate. The second chapter extends the first by examining the relationship between international trade and intergenerational educational mobility. My household model shows that international trade can increase intergenerational mobility through both the skill premium and income channels when credit constraints are present. My empirical findings based on Thailand's household data confirm that trade exposure leads to both upward mobility via the income effect and downward mobility via the skill premium effect. The final chapter completes the story by discussing how changes in China's export structure affect competitiveness and returns to skill in Southeast Asia. I use a general equilibrium Ricardian trade model to simulate China's human capital accumulation and domestic-oriented industrial policies. The results suggest that Thailand and other developing Southeast Asian economies may lose competitiveness in skill-intensive manufacturing sectors and have to specialize more in resource-based exports. The returns to skill in these developing economies also tend to fall. The findings of these three chapters of my dissertation remind us that international trade can both help and hinder the long-term development goal of human capital investment.