Endogenous labor supply and international trade

We construct an international trade model with an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We show that the labor supply is inverted U-shaped with respect to technological progress. We also show that welfare is U-shaped with respect to trade costs whereas welfare and technological progress are positively related. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.