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Do tariff reductions affect the wages of workers in protected industries? Evidence from the Canada-U.S. Free Trade Agreement

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Author Info
James Townsend

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Abstract

In this paper, I use Canadian micro-data on individual workers to investigate the effect on wages of the tariff reductions mandated by the Canada-U.S. Free Trade Agreement (CUSFTA). The literature on industry wage premia has revealed that the industry of employment is an important determinant of a worker's wage. My findings indicate that relative wages fell in those industries that faced the deepest tariff cuts. This effect was experienced regardless of whether or not workers belonged to a union, suggesting that CUSFTA reduced the returns to industry-specific human capital for those workers in the mostly heavily affected industries.

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File URL: http://economics.ca/cgi/xms?jab=v40n1/CJEv40n1p0069.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 40 (2007)
Issue (Month): 1 (February)
Pages: 69-92
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Handle: RePEc:cje:issued:v:40:y:2007:i:1:p:69-92

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Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade

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This page was last updated on 2009-12-21.

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