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Recent Perspectives on Trade and Inequality

Listed author(s):
  • Ann Harrison

    (Department of Agricultural and Resource Economics, University of California, Berkeley, California 94720, and The World Bank, Washington, DC 20433)

  • John McLaren

    ()

    (Department of Economics, University of Virginia, Charlottesville, Virginia 22904-4182)

  • Margaret McMillan

    (Department of Economics, Tufts University, Medford, Massachusetts 02155, and IFPRI, Washington, DC 20006-1002)

The 1990s dealt a blow to traditional Heckscher-Ohlin analysis of the relationship between trade and income inequality, as it became clear that rising inequality in low-income countries and other features of the data were inconsistent with that model. As a result, economists moved away from trade as a plausible explanation for rising income inequality. In recent years, however, a number of new mechanisms have been explored through which trade can affect (and usually increase) income inequality. These include within-industry effects due to heterogeneous firms, the effects of offshoring of tasks, effects on incomplete contracting, and the effects of labor-market frictions. A number of these mechanisms have received substantial empirical support.

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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.economics.102308.124451
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Article provided by Annual Reviews in its journal Annual Review of Economics.

Volume (Year): 3 (2011)
Issue (Month): 1 (09)
Pages: 261-289

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Handle: RePEc:anr:reveco:v:3:y:2011:p:261-289
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  18. Erhan Artuç & Shubham Chaudhuri & John McLaren, 2007. "Delay and Dynamics in Labor Market Adjustment: Simulation Results," Koç University-TUSIAD Economic Research Forum Working Papers 0703, Koc University-TUSIAD Economic Research Forum.
  19. Avraham Ebenstein & Ann Harrison & Margaret McMillan & Shannon Phillips, 2009. "Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys," Discussion Papers Series, Department of Economics, Tufts University 0742, Department of Economics, Tufts University.
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  37. Martin Ravallion, 2004. "The Debate on Globalization, Poverty and Inequality: why Measurement Matters," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
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