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Skilled-Unskilled Wage Gap Versus Evolving Trade And Labour Market Structures in the EU

Author

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  • Aleksandra Parteka

    (Gdansk University of Technology, Gdansk, Poland)

Abstract

This paper proposes an alternative approach to the empirical study of wage gap between workers with different educational levels in the enlarged EU. The analysis is based on sectoral database, linking labor market statistics and trade data at the level of 12 manufacturing sectors in a group of 20 European countries: selected New Member States (NMS-5) and former EU-15 economies, in the period 1995-2005. The results of the empirical model suggest that wage inequality between workers with academic education and lower is associated mainly with domestic (and not foreign) labor market conditions and, to a lower extent, to trade forces. Degree of trade penetration affects skilled-unskilled wage gaps but we do not find significant wage effects of imports from less developed EU countries. The same result is confirmed when we consider trade in intermediates and outsourcing practices in Europe.

Suggested Citation

  • Aleksandra Parteka, 2012. "Skilled-Unskilled Wage Gap Versus Evolving Trade And Labour Market Structures in the EU," Working Papers 1204, Instytut Rozwoju, Institute for Development.
    • Handle: RePEc:iro:wpaper:1204
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    2. Sang-Wook (Stanley) Cho & Juliàn P. Dìaz, 2014. "Accounting for Skill Premium Patterns during the EU Accession: Productivity or Trade?," Discussion Papers 2014-14, School of Economics, The University of New South Wales.

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    More about this item

    Keywords

    wage inequality; skills; integration;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • 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

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