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Time-Series Wage Differential in Taiwan: The Role of International Trade

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  • Chen, Been-Lon
  • Hsu, Mei

Abstract

Rising relative wages between skilled and unskilled workers in developed countries has been a popular subject of recent studies. This paper analyzes Taiwan, a semi-developed economy, where the relative wage reveals a declining trend since the mid-1980s. The authors study the role of international trade. A major point of departure is to distinguish the effects of net exports to OECD countries from those to non-OECD countries. The paper also differentiates the effects of net exports to China from those to non-OECD countries except China. It is found that net exports to the OECD countries raise the relative wage of skilled workers, whereas net exports to non-OECD countries and China diminish the relative wage. Moreover, the impacts of net exports to China are much larger than those to OECD and other non-OECD countries. The documented wage effects of international trade in this work diverge from what existing works have argued based on Heckscher-Ohlin theory. Copyright 2001 by Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 5 (2001)
Issue (Month): 2 (June)
Pages: 336-54

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Handle: RePEc:bla:rdevec:v:5:y:2001:i:2:p:336-54

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Cited by:
  1. Devadason, Evelyn, 2007. "Do Trading Partners Matter for Labour Market Inequality? The Malaysian Case," Review of Applied Economics, Review of Applied Economics, vol. 3(1-2).
  2. Hsiao-chuan Chang, 2003. "International Trade, Productivity Growth, Education and the Wage Differential: A Case Study of Taiwan," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 25-48, May.
  3. Chang, Hsaio-chuan, 1999. "Wage Differential, Trade, Productivity Growth and Education," Departmental Working Papers 2000-01, The Australian National University, Arndt-Corden Department of Economics.
  4. Chang, H.-C., 2001. "International Trade, Productivity Growth, Education and Wage Differentials: A Case Study of Taiwan," Department of Economics - Working Papers Series 783, The University of Melbourne.
  5. Chun-Hung Lin & Peter Orazem, 2003. "Wage Inequality and Returns to Skill in Taiwan, 1978-96," Journal of Development Studies, Taylor & Francis Journals, vol. 39(5), pages 89-108.
  6. Yu-Chen Kuo, 2008. "Wage Inequality and Propensity to Marry after 1980 in Taiwan," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 7(3), pages 231-248, December.

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