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Policy Implications of the Trade and Wages Debate

Author

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  • Deardorff, A.V.

Abstract

This paper examines the choice of policies to redistribute income in response to an increase in inequality caused by a rise in the differential wage paid to skilled labor compared to unskilled labor. The main issue is whether the appropriate policy response depends on the cause of the increased differential. In particular, should policies respond any differently if the rising differential is due to "trade" -shorthand for greater openness in global markets and/or greater participation in those markets by developing countries abundantly endowed with unskilled labor - or due to technological changes that have favored skilled labor over unskilled labor.

Suggested Citation

  • Deardorff, A.V., 1999. "Policy Implications of the Trade and Wages Debate," Working Papers 440, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:440
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    Cited by:

    1. Arghya Ghosh & Peter E. Robertson & Marie-Claire Robitaille, 2016. "Does Globalisation Affect Crime? Theory and Evidence," The World Economy, Wiley Blackwell, vol. 39(10), pages 1482-1513, October.
    2. Jurgen Meckl & Benjamin Weigert, 2003. "Globalization, technical change and the skill premium: magnification effects from human - capital investments," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 319-336.
    3. Sunil Mithas & Jonathan Whitaker, 2007. "Is the World Flat or Spiky? Information Intensity, Skills, and Global Service Disaggregation," Information Systems Research, INFORMS, vol. 18(3), pages 237-259, September.
    4. Dumont, Michel, 2004. "The Impact of International Trade with Newly Industrialised Countries on the Wages and Employment of Low-Skilled and High-Skilled Workers in the European Union," Thesis Commons bmxag, Center for Open Science.

    More about this item

    Keywords

    TRADE ; WAGES;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D30 - Microeconomics - - Distribution - - - General

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