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Income Inequality and Trade: How to Think, What to Conclude

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  • J. David Richardson
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    Abstract

    Recent econometric work and growing analytical consensus suggest that exogenous international market pressures are a contributing factor to trends in U.S. wage/earnings inequality. Trade accounts for a share of these inequality trends close to or somewhat greater than its 10-15 percent share of economic activity, especially over medium-term horizons and dependent on precise definition. Trade is neither a trivial influence nor a dominant one. Evidence exists that its influence has declined slightly in the past decade, however. Rapid technological growth in exportable sectors seems more important.

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.9.3.33
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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: 33-55

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    Handle: RePEc:aea:jecper:v:9:y:1995:i:3:p:33-55
    Note: DOI: 10.1257/jep.9.3.33
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    Keywords:

    Find related papers by JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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    1. Baldwin, Robert E. & Mutti, John H. & Richardson, J. David, 1980. "Welfare effects on the United States of a significant multilateral tariff reduction," Journal of International Economics, Elsevier, vol. 10(3), pages 405-423, August.
    2. Grossman, Gene M., 1986. "Imports as a cause of injury: The case of the U.S. steel industry," Journal of International Economics, Elsevier, vol. 20(3-4), pages 201-223, May.
    3. Haveman, J.D., 1994. "The Influence of Changing Trade Patterns of Displacements of Labor," Papers 94-012, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
    4. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
    5. Haveman, J-D, 1996. "The Effect of Trade Induced Displacement on Unemployment and Wages," Papers 96-012, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
    6. Edward E. Leamer, 1994. "American Regionalism and Global Free Trade," NBER Working Papers 4753, National Bureau of Economic Research, Inc.
    7. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    8. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    9. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
    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. Ana L. Revenga, 1992. "Exporting Jobs?The Impact of Import Competition on Employment and Wages in U. S. Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 255-284.
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