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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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    1. Ramana Ramaswamy & Bob Rowthorn, 1997. "Deindustrialization," IMF Working Papers 97/42, International Monetary Fund.
    2. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Åsa Johansson & Eduardo Olaberria, 2014. "Long-term Patterns of Trade and Specialisation," OECD Economics Department Working Papers 1136, OECD Publishing.
    2. 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].
    3. Helpman, Elhanan & Itskhoki, Oleg & Redding, Stephen J., 2009. "Inequality and Unemployment in a Global Economy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7353, C.E.P.R. Discussion Papers.
    4. 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, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 497-512, november.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. Mollick, André Varella, 2012. "Income inequality in the U.S.: The Kuznets hypothesis revisited," Economic Systems, Elsevier, vol. 36(1), pages 127-144.
    10. Henze, Philipp, 2014. "Structural change and wage inequality: Evidence from German micro data," Center for European, Governance and Economic Development Research Discussion Papers 204, University of Goettingen, Department of Economics.
    11. 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.
    12. Klein, Michael W. & Moser, Christoph & Urban, Dieter M., 2013. "Exporting, skills and wage inequality," Labour Economics, Elsevier, Elsevier, vol. 25(C), pages 76-85.
    13. Kolev, Alexandre & Saget, Catherine, 2010. "Are middle-paid jobs in OECD countries disappearing? : An overview," ILO Working Papers, International Labour Organization 456740, International Labour Organization.

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