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The Trade and Labour Approaches to Wage Inequality

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  • Jonathan E. Haskel

    (Queen Mary and Westfield College, University of London)

Abstract

We compare the trade and labour approaches to wage inequality. We first look at the theoretical differences, stressing the different roles ascribed to sector and factor bias, labour supply and the theory of technical change in trade models with endogenous prices. We then briefly review some of the evidence on the sector bias of prices and technology.

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Bibliographic Info

Paper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 405.

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Date of creation: Jul 1999
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Handle: RePEc:qmw:qmwecw:wp405

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Keywords: Wage inequality; Technical change; Stolper-Samuelson effects;

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References

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  1. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
  2. E. Berman & J. Bound & S. Machin, 1997. "Implications of skill-biased technological change: international evidence," LSE Research Online Documents on Economics 20314, London School of Economics and Political Science, LSE Library.
  3. Deardorff, A.V., 1997. "Factor Prices and the Factor Content of Trade Revisited: What's the Use?," Working Papers 409, Research Seminar in International Economics, University of Michigan.
  4. repec:fth:michin:409 is not listed on IDEAS
  5. Haskel, Jonathan & Slaughter, Matthew, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," CEPR Discussion Papers 1940, C.E.P.R. Discussion Papers.
  6. Haskel, Jonathan & Slaughter, Matthew, 1999. "Trade, Technology and UK Wage Inequality," CEPR Discussion Papers 2091, C.E.P.R. Discussion Papers.
  7. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
  8. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
  9. Donald R. Davis, 1996. "Technology, Unemployment, and Relative Wages in a Global Economy," NBER Working Papers 5636, National Bureau of Economic Research, Inc.
  10. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
  11. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
  12. Bradford J Jensen & Andrew B Bernard, 1994. "Exporters, Skill Upgrading And The Wage Gap," Working Papers 94-13, Center for Economic Studies, U.S. Census Bureau.
  13. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  14. Deardorff, A.V., 1998. "Technology, Trade, and Increasing Inequality: Does the Cause Matter for the Cure," Papers 98-15, Michigan - Center for Research on Economic & Social Theory.
  15. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184 Elsevier.
  16. Edward E. Leamer, 1996. "What's the Use of Factor Contents?," NBER Working Papers 5448, National Bureau of Economic Research, Inc.
  17. Matthew J. Slaughter, 1999. "Globalisation and Wages: A Tale of Two Perspectives," The World Economy, Wiley Blackwell, vol. 22(5), pages 609-629, 07.
  18. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557.
  19. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
  20. Desjonqueres, Thibaut & Machin, Stephen & Van Reenen, John, 1999. " Another Nail in the Coffin? Or Can the Trade Based Explanation of Changing Skill Structures Be Resurrected?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 533-54, December.
  21. Leamer, Edward E., 2007. "Linking the Theory with the Data: That is the Core Problem of International Economics," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 67 Elsevier.
  22. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
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Citations

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Cited by:
  1. Fontagne, Lionel & Daniel Mirza, 2002. "International Trade and Rent Sharing in Developed and Developing countries," Royal Economic Society Annual Conference 2002 77, Royal Economic Society.
  2. Neary, J Peter, 2001. "Competition, Trade and Wages," CEPR Discussion Papers 2732, C.E.P.R. Discussion Papers.
  3. J Peter Neary, 2002. "Globalisation and Market Structure," Working Papers 200220, School Of Economics, University College Dublin.
  4. Neary, J Peter, 2002. "Foreign Competition and Wage Inequality," CEPR Discussion Papers 3420, C.E.P.R. Discussion Papers.
  5. Falzoni, Anna M. & Venturini, Alessandra & Villosio, Claudia, 2004. "Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996," IZA Discussion Papers 1204, Institute for the Study of Labor (IZA).
  6. Anna M. Falzoni & Alessandra Venturini & Claudia Villosio, 2007. "Skilled and Unskilled Wage Dynamics in Italy in the ‘90s: Changes in the individual characteristics, institutions, trade and technology," LABORatorio R. Revelli Working Papers Series 61, LABORatorio R. Revelli, Centre for Employment Studies.
  7. Julius Spatz, 2001. "Explaining Intra- and Intersectoral Wage Differentials in Simple General Equilibrium Trade Models," Kiel Working Papers 1042, Kiel Institute for the World Economy.
  8. Hijzen, Alexander & Görg, Holger & Hine, Robert C., 2003. "International Fragmentation and Relative Wages in the UK," IZA Discussion Papers 717, Institute for the Study of Labor (IZA).
  9. José Gabriel Palma, 2006. "Globalizing Inequality: ‘Centrifugal’ and ‘Centripetal’ Forces at Work," Working Papers 35, United Nations, Department of Economics and Social Affairs.
  10. Egger, Peter & Pfaffermayr, Michael & Wolfmayr-Schnitzer, Yvonne, 2001. "The international fragmentation of Austrian manufacturing: The effects of outsourcing on productivity and wages," The North American Journal of Economics and Finance, Elsevier, vol. 12(3), pages 257-272, November.
  11. Taylor, Karl & Driffield, Nigel, 2005. "Wage inequality and the role of multinationals: evidence from UK panel data," Labour Economics, Elsevier, vol. 12(2), pages 223-249, April.
  12. Hofer, Helmut & Huber, Peter, 2001. "Wage and Mobility Effects of Trade and Migration on the Austrian Labour Market," Economics Series 97, Institute for Advanced Studies.

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