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Trade and wages in Colombia

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  • Donald Robbins

Abstract

This paper examines the impacts of real devaluation, trade liberalization and the growing relative supply of skill on wage dispersion in Colombia’s seven principal cities over 1976-1994. The Hecksher-Ohlin-Samuelson(HOS) framework predicts that while labor supply shifts and devaluation should not affect wage dispersion, trade liberalization should compress wages in LDC’s. My findings differ: growth in the supply of skills lowers, and liberalization and real devaluation raise, wage dispersion. This is not due to failure of the HOS assumptions of factor-diversified trade or that Colombia is skilled relative to the world average. The data are consistent with non-HOS assumptions where devaluation and liberalization encourage capital and embodied technical flows.

Suggested Citation

  • Donald Robbins, 1997. "Trade and wages in Colombia," Estudios de Economia, University of Chile, Department of Economics, vol. 24(1 Year 19), pages 47-83, June.
    • Handle: RePEc:udc:esteco:v:24:y:1997:i:1:p:47-83
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    Citations

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    Cited by:

    1. Julien Gourdon, 2011. "Wage inequality in developing countries: South–South trade matters," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 359-383, December.
    2. Remco H. Oostendorp, 2009. "Globalization and the Gender Wage Gap," The World Bank Economic Review, World Bank, vol. 23(1), pages 141-161, January.
    3. Martin Rama, 2002. "Mondialisation, inégalités et politiques de l'emploi," Revue d’économie du développement, De Boeck Université, vol. 10(1), pages 43-83.
    4. Peter H. Lindert & Jeffrey G. Williamson, 2002. "Mondialisation et inégalité : une longue histoire," Revue d’économie du développement, De Boeck Université, vol. 10(1), pages 7-41.
    5. Peter H. Lindert & Jeffrey G. Williamson, 2003. "Does Globalization Make the World More Unequal?," NBER Chapters, in: Globalization in Historical Perspective, pages 227-276, National Bureau of Economic Research, Inc.

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