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How Trade Hurt Unskilled Workers

  • Adrian Wood

This paper argues that the main cause of the deteriorating economic position of unskilled workers in the United States and other developed countries has been expansion of trade with developing countries. In the framework of a Heckscher-Ohlin model, it outlines the evidence in support of this view, responds to criticisms of this evidence, and challenges the evidence for the alternative view that the problems of unskilled workers are caused mainly by new technology. The paper concludes with a look at the future and at the implications for public policy.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.9.3.57
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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: 57-80

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Handle: RePEc:aea:jecper:v:9:y:1995:i:3:p:57-80
Note: DOI: 10.1257/jep.9.3.57
Contact details of provider: Web page: https://www.aeaweb.org/jep/
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  1. Richard B. Freeman, 1994. "Working Under Different Rules," NBER Books, National Bureau of Economic Research, Inc, number free94-1, August.
  2. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  3. Robert Z. Lawrence, 1994. "Trade, Multinationals, & Labor," NBER Working Papers 4836, National Bureau of Economic Research, Inc.
  4. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
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