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Trade, technology, and the rise of the service sector: The effects on US wage inequality

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  • Blum, Bernardo S.
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    Abstract

    This paper uses a multi-sector version of the Ricardo-Viner model of international trade to quantify empirically the effects of technological changes, international trade, changes in the sectoral composition of the economy, and other factors on the US wage premium. The main finding of the paper is that changes in the sectoral composition of the economy were the most important force behind the widening of the wage gap, accounting for about 60% of the relative increase in wages of skilled workers between 1970 and 1996. In essence, capital was reallocated to sectors where it is relatively complementary to skilled workers.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Economics.

    Volume (Year): 74 (2008)
    Issue (Month): 2 (March)
    Pages: 441-458

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    Handle: RePEc:eee:inecon:v:74:y:2008:i:2:p:441-458

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    Web page: http://www.elsevier.com/locate/inca/505552

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    Cited by:
    1. Michael W. Klein & Christoph Moser & Dieter M. Urban, 2010. "The Contribution of Trade to Wage Inequality: The Role of Skill, Gender, and Nationality," NBER Working Papers 15985, National Bureau of Economic Research, Inc.
    2. Wei-Bin Zhang, 2011. "Global Economic Growth, Elastic Labor Supply, Knowledge Utilization And Creation With Learning-By-Doing," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 497-512, november.
    3. Dauth, Wolfgang & Findeisen, Sebastian & Suedekum, Jens, 2012. "The rise of the East and the Far East : German labor markets and trade integration," IAB Discussion Paper 201216, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2009. "Inequality and Unemployment in a Global Economy," CEP Discussion Papers dp0940, Centre for Economic Performance, LSE.
    5. Kolev, Alexandre & Saget, Catherine, 2010. "Are middle-paid jobs in OECD countries disappearing? : An overview," ILO Working Papers 456740, International Labour Organization.
    6. Klein, Michael W. & Moser, Christoph & Urban, Dieter M., 2013. "Exporting, skills and wage inequality," Labour Economics, Elsevier, vol. 25(C), pages 76-85.
    7. David H. Autor & David Dorn & Gordon H. Hanson & Jae Song, 2013. "Trade Adjustment: Worker Level Evidence," NBER Working Papers 19226, National Bureau of Economic Research, Inc.
    8. Anwar, Sajid & Rice, John, 2009. "Labour mobility and wage inequality in the presence of endogenous foreign investment," Economic Modelling, Elsevier, vol. 26(6), pages 1135-1139, November.
    9. Szalavetz, Andrea, 2008. "A szolgáltatási szektor és a gazdasági fejlődés
      [The service sector and economic development]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 503-521.
    10. Mollick, André Varella, 2012. "Income inequality in the U.S.: The Kuznets hypothesis revisited," Economic Systems, Elsevier, vol. 36(1), pages 127-144.
    11. Anwar, Sajid & Sun, Sizhong & Valadkhani, Abbas, 2013. "International outsourcing of skill intensive tasks and wage inequality," Economic Modelling, Elsevier, vol. 31(C), pages 590-597.

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