Trade and wage inequality: Local versus Global comparative advantages
AbstractThis paper shows that disentangling the local and global dimensions of trade can be crucial to get a better understanding of the trade impact on wage inequality. In particular, it allows us to reconcile the empirical evidence with the Heckscher-Ohlin-Samuelson predictions. Our focus here is on Italy, which represents, in our opinion, an appropriate case study. As for local trade -within its own cone of diversification - Italy is specialized in the production of unskill-intensive goods, while for global trade -with respect to the other cone of diversification- it is mainly specialized in the production of skill-intensive goods. On the evidence of these specialization patterns, we point out that the local trade entails a strong impact on wage inequality. In particular, in line with the Heckscher-Ohlin-Samuelson predictions, the local export performance reduces wage inequality since it favours blue-collar workers. As for global trade, it affects and increases wage inequality through the export channel, again consistently with the Heckscher-Ohlin-Samuelson predictions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Dipartimento di Economia, Sapienza University of Rome in its series Working Papers - Dipartimento di Economia with number 6-DEISFOL.
Length: 31 pages
Date of creation: 2008
Date of revision: 2008
Trade Specialization; Wage Inequality; Skill Premium;
Other versions of this item:
- Alessia Matano & Paolo Naticchioni, 2010. "Trade and Wage Inequality: Local versus Global Comparative Advantages," The World Economy, Wiley Blackwell, vol. 33(12), pages 1757-1787, December.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Paolo Naticchioni & Andrea Ricci & Emiliano Rustichelli, 2008. "Wage Inequality, Employment Structure and Skill-biased Change in Italy," LABOUR, CEIS, vol. 22(s1), pages 27-51, 06.
- Alessia Matano & Paolo Naticchioni, 2009. "Wage distribution and the spatial sorting of workers and firms," Working Papers - Dipartimento di Economia 8-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2009.
- Paolo Naticchioni & Andrea Ricci, 2010.
"Decreasing Wage Inequality in Italy: The Role of Supply and Demand for Education,"
Working Papers CELEG
1004, Dipartimento di Economia e Finanza, LUISS Guido Carli.
- Paolo Naticchioni & Andrea Ricci, 2009. "Decreasing Wage Inequality in Italy: The Role of Supply and Demand for Education," Working Papers - Dipartimento di Economia 9-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2009.
- Rafal Kierzenkowski & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 8. The Drivers of Labour Income Inequality – A Literature Review," OECD Economics Department Working Papers 931, OECD Publishing.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Claudio Sardoni).
If references are entirely missing, you can add them using this form.