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Are Your Wages Set in Beijing?

  • Richard B. Freeman

The economic troubles of less-skilled workers in the United States. and OECD-Europe during a period of rising manufacturing imports from third world countries has created a debate about whether, in a global economy, wages or employment are determined by the global rather than domestic labor-market conditions. One side argues that trade is all that matters; another side, that trade does not matter at all. The author rejects these polar views; empirical analysis has found modest but real trade effects in displacement of less-skilled labor and declines in the price of goods produced by low-skilled workers.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.9.3.15
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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 9 (1995)
Issue (Month): 3 (Summer)
Pages: 15-32

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Handle: RePEc:aea:jecper:v:9:y:1995:i:3:p:15-32
Note: DOI: 10.1257/jep.9.3.15
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  1. Neary, J Peter & Schweinberger, Albert G, 1986. "Factor Content Functions and the Theory of International Trade," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 421-32, July.
  2. Norman, Victor D & Venables, Anthony J, 1995. "International Trade, Factor Mobility and Trade Costs," Economic Journal, Royal Economic Society, vol. 105(433), pages 1488-1504, November.
  3. Deardorff, Alan V. & Staiger, Robert W., 1988. "An interpretation of the factor content of trade," Journal of International Economics, Elsevier, vol. 24(1-2), pages 93-107, February.
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