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Searching for the Smoking Gun: Did Trade Hurt Unskilled Workers?

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  • Winchester, Niven

Abstract

We contribute to the trade-wage literature by conducting the first economy-wide analysis of the association between trade and wages in New Zealand. We find that increased imports since 1980 caused only a marginal increase in New Zealand wage inequality and, overall, increased trade (imports and exports) reduced wage inequality in this nation. As New Zealand imports of unskilled labour-intensive products relative to GDP are larger than those for other developed nations, we interpret these results as convincing evidence that trade is not responsible for rising wage inequality in developed nations.

Suggested Citation

  • Winchester, Niven, 2006. "Searching for the Smoking Gun: Did Trade Hurt Unskilled Workers?," Conference papers 331501, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331501
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    Cited by:

    1. Harris, Richard G. & Robertson, Peter E., 2013. "Trade, wages and skill accumulation in the emerging giants," Journal of International Economics, Elsevier, vol. 89(2), pages 407-421.
    2. Viaene, Jean-Marie & Zilcha, Itzhak, 2013. "Public funding of higher education," Journal of Public Economics, Elsevier, vol. 108(C), pages 78-89.
    3. Niven Winchester, 2008. "Trade and Rising Wage Inequality: What Can We Learn from a Decade of Computable General Equilibrium Analysis?," Palgrave Macmillan Books, in: David Greenaway & Richard Upward & Peter Wright (ed.), Globalisation and Labour Market Adjustment, chapter 4, pages 54-72, Palgrave Macmillan.

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    More about this item

    Keywords

    International Relations/Trade; Labor and Human Capital;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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