A rising skill premium in two countries can be explained 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---relatively high-skill intensive within the U.S. but relatively low-skill intensive within Mexico---increased from 1994 to 2000. U.S. net imports from Mexico of non-electronics products---relatively low-skill intensive within the U.S. but relatively high-skill intensive within Mexico---increased as well. The skill premium also increased in both countries.
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Paper provided by Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba in its series Tsukuba Economics Working Papers with number
2009-010.