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The Impact of International Trade on the Wages of Canadians

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  • Zakhilwal, Omar
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    Abstract

    Developments in the relative wages of more and less educated workers during the early 1990s are examined using the Survey of Labour and Income Dynamics. Particular attention is paid to the role of international trade in determining the wage differential between workers with post-secondary certification and those without. It is shown that in the absence of the relatively greater growth in the supply of more educated workers, the gap between the wages of more and less educated workers would have increased. After controlling for some of the most likely influences on real wages it is found that international trade has a significant positive impact on the wages of both more and less educated workers. However, the impact on the more highly educated seems to be some four times stronger, roughly the same as the impact of technological change

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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11F0019M2001156&ObjType=46&lang=en&limit=0
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    Bibliographic Info

    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2001156e.

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    Date of creation: 12 Jan 2001
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    Handle: RePEc:stc:stcp3e:2001156e

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    Related research

    Keywords: Globalization and the labour market; International trade; Labour; Labour mobility; turnover and work absences; Trade patterns; Wages; salaries and other earnings;

    References

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    1. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1991. "On the Labor Market Effects of Immigration and Trade," NBER Working Papers 3761, National Bureau of Economic Research, Inc.
    2. Baldwin, John R. & Raffiquzzaman, Mohammed, 1998. "The Effect of Technology and Trade on Wage Differentials Between Nonproduction and Production Workers in Canadian Manufacturing," Analytical Studies Branch Research Paper Series, Statistics Canada, Analytical Studies Branch 1998098e, Statistics Canada, Analytical Studies Branch.
    3. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    4. Lucas, Robert E, Jr, 1993. "Making a Miracle," Econometrica, Econometric Society, Econometric Society, vol. 61(2), pages 251-72, March.
    5. Grossman, Gene M. & Helpman, Elhanan, 1995. "Technology and trade," Handbook of International Economics, Elsevier, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 25, pages 1279-1337 Elsevier.
    6. Morissette, Rene, 1995. "Why Has Inequality in Weekly Earnings Increased in Canada?," Analytical Studies Branch Research Paper Series, Statistics Canada, Analytical Studies Branch 1995080e, Statistics Canada, Analytical Studies Branch.
    7. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, American Economic Association, vol. 89(5), pages 1259-1278, December.
    8. J. A. Hausman & W. E. Taylor, 1980. "Panel Data and Unobservable Individual Effects," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 255, Massachusetts Institute of Technology (MIT), Department of Economics.
    9. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 91(6), pages 957-78, December.
    10. Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc.
    11. Galbraith, James K & Calmon, Paulo Du Pin, 1996. "Wage Change and Trade Performance in U.S. Manufacturing Industries," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 20(4), pages 433-50, July.
    12. Slaughter, Matthew J, 1998. "International Trade and Labour-Market Outcomes: Results, Questions, and Policy Options," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 108(450), pages 1452-62, September.
    13. Hakura, D. & Deardorff, A.V., 1993. "Trade and Wages: What Are the Questions?," Working Papers, Research Seminar in International Economics, University of Michigan 341, Research Seminar in International Economics, University of Michigan.
    14. Steven Saeger, 1997. "Globalization and deindustrialization: Myth and reality in the OECD," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 133(4), pages 579-608, December.
    15. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc.
    16. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 9(3), pages 15-32, Summer.
    17. repec:fth:coluec:761 is not listed on IDEAS
    18. Richard B. Freeman & Karen Needels, 1991. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Working Papers 3827, National Bureau of Economic Research, Inc.
    19. Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 108(450), pages 1463-82, September.
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