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Traded and Nontraded Goods and Real Wages

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  • Hamid Beladi
  • Ravi Batra

Abstract

The paper explains most, if not all, observations made by the empirical literature regarding the behavior of skilled and unskilled real wages in the United States, especially those since 1980. Generalizing the Stopler-Samuelson theorem, the authors show that the nontraded sector is critical to explaining the effects of changes in the price of traded goods on relative and absolute wages. Factor-intensities play their role as in the traditional Stolper-Samuelson model, but the output of the nontraded sector matters as well. Specifically, freer trade benefits capital and hurts both the skilled and unskilled labor if the import as well as the nontraded sectors contract. This is a new result to the literature on Stolper-Samuelson issues. Copyright Blackwell Publishing Ltd 2004.

Suggested Citation

  • Hamid Beladi & Ravi Batra, 2004. "Traded and Nontraded Goods and Real Wages," Review of Development Economics, Wiley Blackwell, vol. 8(1), pages 1-14, February.
  • Handle: RePEc:bla:rdevec:v:8:y:2004:i:1:p:1-14
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    Citations

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    Cited by:

    1. Barua, Alokesh & Pant, Manoj, 2014. "Trade and wage inequality: A specific factor model with intermediate goods," International Review of Economics & Finance, Elsevier, vol. 33(C), pages 172-185.
    2. Chi-Chur Chao & Eden Yu, 2015. "Housing Markets with Foreign Buyers," The Journal of Real Estate Finance and Economics, Springer, vol. 50(2), pages 207-218, February.
    3. repec:ebl:ecbull:v:6:y:2007:i:30:p:1-8 is not listed on IDEAS
    4. Beladi, Hamid & Oladi, Reza, 2011. "An elementary proposition on technical progress and non-traded goods," Journal of Mathematical Economics, Elsevier, vol. 47(1), pages 68-71, January.
    5. Ravi Batra & Hamid Beladi & Reza Oladi, 2013. "Technical Progress and Real Wages Once again," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 506-518, August.
    6. Reza Oladi & Hamid Beladi, 2008. "Non-traded Goods, Technical Progress and Wages," Open Economies Review, Springer, vol. 19(4), pages 507-515, September.
    7. Oladi, Reza & Beladi, Hamid, 2009. "Market interconnection and wages," Economics Letters, Elsevier, vol. 105(1), pages 117-119, October.
    8. Reza Oladi & John Gilbert & Hamid Beladi, 2011. "Foreign Direct Investment, Nonā€Traded Goods And Real Wages," Pacific Economic Review, Wiley Blackwell, vol. 16(1), pages 36-41, February.
    9. Oladi, Reza & Beladi, Hamid, 2010. "On technical progress and the boundary of non-traded goods," Mathematical Social Sciences, Elsevier, vol. 60(3), pages 204-209, November.
    10. repec:eee:reveco:v:51:y:2017:i:c:p:145-156 is not listed on IDEAS
    11. Chi-Chur Chao & Bharat R. Hazari & Eden S. H. Yu, 2010. "Quotas, Spillovers, and the Transfer Paradox in an Economy with Tourism," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 243-249, May.
    12. Hazari, Bharat & Mohan, Vijay, 2015. "Social exclusion, capital accumulation and inequality," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 371-375.
    13. repec:eee:chieco:v:46:y:2017:i:c:p:97-109 is not listed on IDEAS
    14. Reza Oladi & Hamid Beladi, 2007. "International Migration and Real Wages," Economics Bulletin, AccessEcon, vol. 6(30), pages 1-8.
    15. Chao, Chi-Chur & Lu, Lee-Jung & Lai, Ching-Chong & Hu, Shih-Wen & Wang, Vey, 2013. "Devaluation, pass-through and foreign reserves dynamics in a tourism economy," Economic Modelling, Elsevier, vol. 30(C), pages 456-461.

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