Rising skill premium in two countries can be explained simply by the Heckscher-Ohlin model assuming a “skill intensity reversal.” This assumption, however, poses an empirical challenge since past research has found little evidence for the so-called “factor intensity reversal.” We now show clear-cut evidence: U.S. net exports to Mexico of electronics products, which were high-skill intensive in the U.S. but low-skill intensive in Mexico, increased from 1994 to 2000. U.S. net imports from Mexico of non-electronics products, which were low-skill intensive in the U.S. but high-skill intensive in Mexico, increased as well. The skill premium then increased in both countries.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
14013.
Find related papers by JEL classification: F16 - International Economics - - Trade - - - Trade and Labor Market Interactions F11 - International Economics - - Trade - - - Neoclassical Models of Trade F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
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