A Schumpeterian North-South Growth Model of Trade and Wage Inequality
The paper presents a dynamic general-equilibrium model of interindustry North-South trade that is used to analyze the effects of trade liberalization on the Northern wage distribution. Both countries have a low-tech sector where consumer goods of constant quality are produced by use of unskilled labor. The North also has a high-tech sector that employs skilled labor and features a quality-ladder model structure with endogenous growth. Both innovation and skill acquisition rates are endogenously determined. In a balanced trade equilibrium, it is found that Southern-originated (Northern-originated) trade liberalization leads to an increase (decrease) in Northern wage inequality both between skilled and unskilled workers and within the group of skilled workers. The endogenous change in the Southern terms of trade determines the direction of change in unskilled wages in both the North and the South. Copyright Blackwell Publishing Ltd 2005..
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 13 (2005)
Issue (Month): 1 (02)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0965-7576|