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International Trade and American Wages in General Equilibrium, 1967 - 1995

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Author Info
James Harrigan

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Abstract

In the last quarter century, wage inequality has increased dramatically in the United States. At the same time, the US has become more integrated into the world economy prices of final goods have changed, the capital stock has more than doubled has become steadily more educated. This paper estimates a flexible, empirical equilibrium model of wage determination in an attempt to sort out the connections between these trends. Aggregate data on prices and quantities of imports, outputs, and factor supplies are constructed from disaggregate sources. The econometric analysis concludes that wage inequality has been partly driven by changes in relative factor supplies and relative final goods prices. In contrast, imports have played a negligible direct role.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6609.

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Date of creation: Jun 1998
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Handle: RePEc:nbr:nberwo:6609

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Find related papers by JEL classification:
F1 - International Economics - - Trade
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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  1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-35, October. [Downloadable!] (restricted)
  2. R. E. Baldwin & G. G. Cain, . "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  3. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February. [Downloadable!] (restricted)
  4. Robert E. Baldwin & Glen G. Cain, 1997. "Shifts in U.S. Relative Wages: The Role of Trade, Technology and Factor Endowments," NBER Working Papers 5934, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Berndt, Ernst R & Savin, N Eugene, 1975. "Estimation and Hypothesis Testing in Singular Equation Systems with Autoregressive Disturbances," Econometrica, Econometric Society, vol. 43(5-6), pages 937-57, Sept.-Nov. [Downloadable!] (restricted)
  6. Paul Krugman, 1995. "Technology, Trade, and Factor Prices," NBER Working Papers 5355, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Wolak, Frank A., 1989. "Testing inequality constraints in linear econometric models," Journal of Econometrics, Elsevier, vol. 41(2), pages 205-235, June. [Downloadable!] (restricted)
  8. Donald J. Rousslang & Theodore To, 1993. "Domestic Trade and Transportation Costs as Barriers to International Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 208-21, February. [Downloadable!] (restricted)
  9. Matthew J. Slaughter, 1998. "What Are the Results of Product-Price Studies and What Can We Learn From Their Differences?," NBER Working Papers 6591, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Baldwin, Robert E & Cain, Glen C, 1997. "Shifts in US Relative Wages: The Role of Trade, Technology and Factor Endowments," CEPR Discussion Papers 1596, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  11. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September. [Downloadable!] (restricted)
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