Advanced Search
MyIDEAS: Login to save this paper or follow this series

In Search of Stolper-Samuelson Effects on U.S. Wages

Contents:

Author Info

  • Edward E. Leamer

Abstract

Economic growth in Europe and Asia and Latin America could have contri- buted in many different ways to lower wages and increased income inequality that the United States has been experiencing. One plausible model that links external product markets to internal labor markets is the Heckscher-Ohlin- amuelson general equilibrium model. This model operates over a time period long enough to allow complete detachment of workers and capital from their original sectors. According to this model the news of Asian growth is carried to the US labor markets by declines in prices of labor intensive tradables. These price reductions twist the labor demand curve, dictating lower real wages for unskilled workers who reside in communities with abundant unskilled labor but raising the wages for unskilled workers who are fortunate to live in communities inhabited mostly by skilled workers. US relative producer prices of labor-intensive tradables declined in the 1970s by about 30%. These product price declines are compatible in the long run with real wage reductions totalling almost 40% for unskilled workers. In the 1980s however, changes in US producer prices worked in favor of these low-wage workers, raising their equilibrium wages by about 20%. The sectoral bias of TFP growth did not favor low- or high-wage workers, but TFP changes did work strongly in favor of nonproduction workers and against production workers in the 1970s. If these TFP improvements had not generated any product price response, the TFP improvements in the 1970s call for a 100% increase in earnings of nonproduction workers and a 60% reduction in earnings of production workers.

Download Info

If 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.
File URL: http://www.nber.org/papers/w5427.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5427.

as in new window
Length:
Date of creation: Jan 1996
Date of revision:
Publication status: published as Imports, Exports and the American Worker, Collins, Susan, ed.,:Brookings, 1997, pp. 141-214.
Handle: RePEc:nbr:nberwo:5427

Note: ITI
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5427. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.