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Impact of Trade on Productivity of Skilled and Unskilled Intensive Industries: A Cross-Country Investigation

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Author Info

  • Sohrab Abizadeh

    () (Department of Economics, University of Winnipeg)

  • Manish Pandey

    () (Department of Economics, University of Winnipeg)

  • Mehmet Serkan Tosun

    () (University of Nevada, Reno)

Abstract

This paper examines the effect of trade openness on the productivity of skilled labor intensive and unskilled labor intensive industries in the group of 20 OECD countries. Using panel data and fixed effects approach, we find that skilled workers’ relative gains in productivity exceed those of their unskilled counterpart. Given this differential impact of trade openness on the relative productivity of the skilled and unskilled intensive industries, our findings lend support to the conclusions of past studies that skilled labor is likely to be more pro trade than unskilled labor.

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File URL: http://www.business.unr.edu/econ/wp/papers/UNRECONWP07007.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 07-007.

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Length: 24 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:unr:wpaper:07-007

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Related research

Keywords: Trade openness; Skilled intensive industries; Unskilled intensive industries; Productivity;

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  1. Atul Dar & Sal Amirkhalkhali, 2003. "On the impact of trade openness on growth: further evidence from OECD countries," Applied Economics, Taylor and Francis Journals, vol. 35(16), pages 1761-1766.
  2. Zhu, Susan Chun & Trefler, Daniel, 2005. "Trade and inequality in developing countries: a general equilibrium analysis," Journal of International Economics, Elsevier, vol. 65(1), pages 21-48, January.
  3. Francisco Alcalá & Antonio Ciccone, 2001. "Trade and productivity," Economics Working Papers 580, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2002.
  4. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
  5. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
  6. Eugene Beaulieu & Vivek Dehejia & Hazrat-Omar Zakhilwal, 2004. "International Trade, Labour Turnover, and the Wage Premium: Testing the Bhagwati-Dehejia Hypothesis for Canada," CESifo Working Paper Series 1149, CESifo Group Munich.
  7. Jacques Poot, 2000. "A Synthesis of Empirical Research on the Impact of Government onLong-Run Growth," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 31(4), pages 516-546.
  8. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  9. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  10. Rodrik, Rani, 1995. "Trade and industrial policy reform," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 45, pages 2925-2982 Elsevier.
  11. Beñat Bilbao-Osorio & Andrés Rodríguez-Pose, 2004. "From R&D to Innovation and Economic Growth in the EU," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 35(4), pages 434-455.
  12. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  13. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
  14. Sohrab Abizadeh & Mehmet Serkan Tosun, 2007. "Open trade and skilled and unskilled labor productivity in developing countries: A panel data analysis," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 16(3), pages 383-399.
  15. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
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