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Traded and Nontraded Goods and Real Wages

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  • Hamid Beladi
  • Ravi Batra

Abstract

The paper explains most, if not all, observations made by the empirical literature regarding the behavior of skilled and unskilled real wages in the United States, especially those since 1980. Generalizing the Stopler-Samuelson theorem, the authors show that the nontraded sector is critical to explaining the effects of changes in the price of traded goods on relative and absolute wages. Factor-intensities play their role as in the traditional Stolper-Samuelson model, but the output of the nontraded sector matters as well. Specifically, freer trade benefits capital and hurts both the skilled and unskilled labor if the import as well as the nontraded sectors contract. This is a new result to the literature on Stolper-Samuelson issues. Copyright Blackwell Publishing Ltd 2004.

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Bibliographic Info

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

Volume (Year): 8 (2004)
Issue (Month): 1 (02)
Pages: 1-14

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Handle: RePEc:bla:rdevec:v:8:y:2004:i:1:p:1-14

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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Cited by:
  1. repec:ebl:ecbull:v:6:y:2007:i:30:p:1-8 is not listed on IDEAS
  2. Reza Oladi & John Gilbert & Hamid Beladi, 2008. "Foreign Direct Investment, Non-traded Goods and Real Wages," Working Papers 2008-04, Utah State University, Department of Economics, revised 23 Dec 2008.
  3. Hamid Beladi & Reza Oladi, . "Market Interconnection and Wages," Working Papers 0062, College of Business, University of Texas at San Antonio.
  4. Reza Oladi & Hamid Beladi, 2007. "International Migration and Real Wages," Economics Bulletin, AccessEcon, vol. 6(30), pages 1-8.
  5. Reza Oladi & Hamid Beladi, 2008. "Non-traded Goods, Technical Progress and Wages," Open Economies Review, Springer, vol. 19(4), pages 507-515, September.
  6. Oladi, Reza & Beladi, Hamid, 2010. "On technical progress and the boundary of non-traded goods," Mathematical Social Sciences, Elsevier, vol. 60(3), pages 204-209, November.
  7. Beladi, Hamid & Oladi, Reza, 2011. "An elementary proposition on technical progress and non-traded goods," Journal of Mathematical Economics, Elsevier, vol. 47(1), pages 68-71, January.

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