Hermann Otto Hirschfeld Lecture Series 2014

       Wage Inequality and Trade


Stephen Redding

Harold T. Shapiro '64 Professor in Economics

Princeton University Economics Department
Woodrow Wilson School

        20 - 21 October 2014


Wirtschaftswissenschaftliche Fakultät
Humboldt-Universität zu Berlin
Spandauer Str. 1
D-10178 Berlin

In memory of Hermann Otto Hirschfeld

The Lecture Series is named after remarkable German-American statistician Hermann Otto Hartley (known as HOH). Born H.O. Hirschfeld, he completed his PhD in mathematics at Humboldt-Universit├Ąt in 1934. Shortly thereafter, HOH, who was of Jewish descent, emigrated to England where he also changed his name a few years later. He worked at Cambridge, Shofield, and University College, London until 1953 when he again emigrated by taking a position in the United States at Iowa State College. In 1963 he founded Texas A&M University's Institute of Statistics and was the driving force behind its expansion during the next two decades. After his retirement from Texas A&M in 1977, he continued to work until his death in 1980, the last two years as a full professor at Duke University. Throughout his career, HOH advocated for and helped establish statistics as an important and autonomous scientific discipline.

His major research was in the area of survey sampling, but he also contributed to mathematical programming and optimization, as well as working on the estimation of variance components and in the field of biometrics. HOH served as the 74th president of the ASA (American Statistical Association).

In this spirit, the Hermann Otto Hirschfeld Lectures at Humboldt-Universit├Ąt are given since 2003 in memory of an excellent scientist and an advocate of quantitative methods.

More about HOH

About Stephen J. Redding

Stephen J. Redding is currently the Harold T. Shapiro *64 Professor in Economics in the Economics Department and Woodrow Wilson School at Princeton University. Prior to joining Princeton University, he worked at the London School of Economics, Harvard University, Yale University, and the Bank of England.

He is a research associate of the Centre for Economic Performance at the London School of Economics, NBER, a research fellow of the Centre for Economic Policy Research, and a research fellow of the Kiel Institute for the World Economy.

Stephen Redding's research interests include international trade, economic geography, and productivity growth at the firm and industry level. Recent work has examined the relationship between comparative advantage and heterogeneous firms' response to international trade; the role of product choice in understanding firm development and industry dynamics; and the role played by market access in determining economic prosperity.

Publications in academic journals include the American Economic Review, Econometrica, Quarterly Journal of Economics, and the Review of Economic Studies among others.

More about Stephen J. Redding


20 October, 15:30-17:00
This lecture views a class of heterogeneous firm models, in which more productive firms pay higher wages and exporting increases the wage paid by a firm with a given productivity.

As a result, opening the closed economy to trade necessarily raises wage inequality when only some firms export. Once the economy is open to trade, further trade liberalization can either increase decrease wage inequality depending on the initial fraction of exporting firms.

In contrast to neoclassical trade theories, which emphasize wage dispersion between occupations and sectors, these new theories emphasize wage dispersion across workers with similar observed characteristics within occupations and sectors.

21 October, 10:00-11:30
This lecture reviews the empirical evidence in support of the class of heterogeneous firm models that have highlighted firm selection into export markets as a new mechanism for trade to affect wage inequality.

These theoretical predictions receive strong empirical support in Brazilian and Swedish matched employer-employee datasets. Much of overall wage inequality arises within sector-occupations for workers with similar observable characteristics; this within component is driven by wage dispersion between firms; and wage dispersion between firms is related to firm employment and trade participation.

An estimated structural model of heterogeneous firms and trade provides a close approximation to the observed distributions of wages and employment. Counterfactuals within this estimated model confirm that opening the closed economy to trade has sizeable effects on wage inequality through the mechanism of wage dispersion between firms.

For further information please see our flyer

Please register in advance via e-mail to
by October 17th

Participation in the event is free

Organisation and Contact Information

Prof. Dr. Wolfgang Härdle
Prof. Dr. Nikolaus Wolf

Humboldt-Universität zu Berlin
C.A.S.E. - Center for Applied Statistics and Economics
School of Business and Economics
Spandauer Str. 1
D-10178 Berlin

Tel.: +49 (0)30 2093-5623 and +49 (0)30 2093-5630
Fax: +49 (0)30 2093-5649

E-Mail: felix.mihram@hu-berlin.de and stat@wiwi.hu-berlin.de