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

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  1. Alcala, Francisco & Ciccone, Antonio, 2001. "Trade and Productivity," CEPR Discussion Papers 3095, C.E.P.R. Discussion Papers.
  2. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  3. Atul Dar & Sal Amirkhalkhali, 2003. "On the impact of trade openness on growth: further evidence from OECD countries," Applied Economics, Taylor & Francis Journals, vol. 35(16), pages 1761-1766.
  4. 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.
  5. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  6. 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.
  7. Edward E. Leamer, 1996. "In Search of Stolper-Samuelson Effects on U.S. Wages," NBER Working Papers 5427, National Bureau of Economic Research, Inc.
  8. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
  9. Sohrab Abizadeh & Mehmet Serkan Tosun, 2007. "Open trade and skilled and unskilled labor productivity in developing countries: A panel data analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(3), pages 383-399.
  10. 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.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
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