Do tariff reductions affect the wages of workers in protected industries? Evidence from the Canada-U.S. Free Trade Agreement
In this paper, I use Canadian micro-data on individual workers to investigate the effect on wages of the tariff reductions mandated by the Canada-U.S. Free Trade Agreement (CUSFTA). The literature on industry wage premia has revealed that the industry of employment is an important determinant of a worker's wage. My findings indicate that relative wages fell in those industries that faced the deepest tariff cuts. This effect was experienced regardless of whether or not workers belonged to a union, suggesting that CUSFTA reduced the returns to industry-specific human capital for those workers in the mostly heavily affected industries.
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Volume (Year): 40 (2007)
Issue (Month): 1 (February)
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