IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v7y1998i3p299-315.html
   My bibliography  Save this article

On wage-inequalities in the North and in the South

Author

Listed:
  • Hing-Man Leung

Abstract

Northern, developed, skilled-labour rich countries have, in recent years, faced increasing competition from Southern, developing, unskilled-labour rich countries. Many have blamed the South for aggravating the wage-inequality in the North. We build a hybrid model with Heckscher-Ohlin and Ricardian characteristics to tackle this issue. Relative demand for the skilled-labour-intensive good (e.g. cars, computers and computer software) plays a bigger role here than elsewhere in the literature. We find the usual H-O mechanism leads to relative wage convergence, divergence or reversal depending on the relative strength of relative demand, technology and endowment effects. More provocative results arise from innovation/imitation considerations: Northern innovation aggravates Northern wage-inequality but alleviates Southern wage-inequality; Southern imitation alleviates Northern wage-inequality but aggravates Southern wage-inequality.

Suggested Citation

  • Hing-Man Leung, 1998. "On wage-inequalities in the North and in the South," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(3), pages 299-315.
    • Handle: RePEc:taf:jitecd:v:7:y:1998:i:3:p:299-315
    DOI: 10.1080/09638199800000016
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638199800000016
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638199800000016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert Z. Lawrence, 1994. "Trade, Multinationals, & Labor," NBER Working Papers 4836, National Bureau of Economic Research, Inc.
    2. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    3. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
    4. Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feng Dai & Songtao Wu & Ling Liang & Zifu Qin, 2016. "Bilateral Trade under Environmental Pressure: Balanced Growth," Journal of Industry, Competition and Trade, Springer, vol. 16(2), pages 209-231, June.
    2. Manoj Pant & Sugandha Huria, 2020. "Labour, Trade, and Wage Inequality: Some New Results," Working Papers 2043, Indian Institute of Foreign Trade.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nahuis, R., 1997. "On Globalisation, Trade and Wages," Research Memorandum 747, Tilburg University, School of Economics and Management.
    2. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
    3. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    4. Kym Anderson & Richard Snape & Hadi Soesastro & Robert McDougall & Rod Tyers, 1995. "China and East Asia Trade Policy, Volume I, East Asia Beyond the Uruguay Round," Asia Pacific Economic Papers 248, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    5. Campbell, Douglas L. & Lusher, Lester, 2019. "The impact of real exchange rate shocks on manufacturing workers: An autopsy from the MORG," Journal of International Money and Finance, Elsevier, vol. 91(C), pages 12-28.
    6. Rey, Sergio, 2015. "Bells in Space: The Spatial Dynamics of US Interpersonal and Interregional Income Inequality," MPRA Paper 69482, University Library of Munich, Germany.
    7. Nathalie Chusseau & Michel Dumont, 2012. "Growing Income Inequalities in Advanced," Working Papers hal-00993359, HAL.
    8. Alan B. Krueger, 1997. "Labor Market Shifts and the Price Puzzle Revisited," NBER Working Papers 5924, National Bureau of Economic Research, Inc.
    9. Carsten Ochsen, 2006. "Zukunft der Arbeit und Arbeit der Zukunft in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 173-193, May.
    10. Adrian Wood, 1997. "How Trade Hurt Unskilled Workers," Palgrave Macmillan Books, in: Jitendralal Borkakoti & Chris Milner (ed.), International Trade and Labour Markets, chapter 7, pages 140-168, Palgrave Macmillan.
    11. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    12. Gustavo Gonzaga & Beatriz Muriel & Cristina Terra, 2005. "Abertura Comercial, Desigualdade Salarial E Sindicalização," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 073, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. R. E. Baldwin & G. G. Cain, "undated". "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty.
    14. Rita A. Balaban & James Harrigan, 1999. "U.S. wages in general equilibrium: the effects of prices, technology and factor supplies, 1963-1991," Staff Reports 64, Federal Reserve Bank of New York.
    15. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    16. Luisa Lambertini, 2001. "Technological Change and Public Financing of Education," Boston College Working Papers in Economics 579, Boston College Department of Economics.
    17. Francis Kramarz, 2003. "Wages and International Trade," Working Papers 2003-27, Center for Research in Economics and Statistics.
    18. Singh, Ajit, 1996. "Expanding employment in the global economy: the high road or the low road?," MPRA Paper 54991, University Library of Munich, Germany.
    19. Patricio Meller & Andrea Tokman, 1996. "Apertura comercial y diferencial salarial en Chile," Coyuntura Económica, Fedesarrollo, September.
    20. Daniel Trefler, 1997. "Immigrants and Natives in General Equilibrium Trade Models," NBER Working Papers 6209, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:7:y:1998:i:3:p:299-315. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.