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Chaging Comparative Advantage and Intra-Industry Trade in Korean Manufacturing Industries

Author

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  • Yong-Yil Choi

    (Hansung University)

Abstract

This paper develops a general equilibrium model for examining the impact of free trade on the wage inequality in the Northern economy and synthesizing the sensitivity of wage inequality indices to changes in causal factors: The model has three types of labor sector-specific high-skilled, mobile unskilled and im-mobile unskilled labor. Thus; three types of wage inequality indices are derived The major findings are first, introducing heterogeneous classes of labor the overall wage inequality of the Northern economy does not necessarily deteriorate with free trade second expenditure shifts for the final good that is produced by high-skill content requirements always lead to a rise in overall wage inequali-ty third the sensitivity of the wage inequality indices to biased technological changes is greatly affected by factor mobility.

Suggested Citation

  • Yong-Yil Choi, 1998. "Chaging Comparative Advantage and Intra-Industry Trade in Korean Manufacturing Industries," Korean Economic Review, Korean Economic Association, vol. 14, pages 189-203.
  • Handle: RePEc:kea:keappr:ker-199806-14-1-11
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    More about this item

    Keywords

    Free Trade; Wage Inequality Indices; Differentiated Intermediate Goods;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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