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International competition and wage differentials - the case of Taiwan

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  • Hsin Chang Lu

Abstract

This paper documents and investigates the structure of relative wages among skill groups (distinguished by gender, education and potential experience) in Taiwan over the period 1978 to 1990. To account for these changes, I construct a model of wage determination in which demographic groups are treated as separate inputs into the production process. Thus, the changes in relative wages are determined by (i) changes in the relative supply of input factors; (ii) changes in the product composition; and (iii) biased technical changes that shift the relative demand for inputs. Analysis of OECD trade statistics shows that manufacturing imports from Taiwan to OECD, the main source of derived demand for the unskilled labour, exhibited a time pattern that matches the overall relative demand shifts.

Suggested Citation

  • Hsin Chang Lu, 2001. "International competition and wage differentials - the case of Taiwan," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(1), pages 101-114.
    • Handle: RePEc:taf:jitecd:v:9:y:2001:i:1:p:101-114
    DOI: 10.1080/096381900362571
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    References listed on IDEAS

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    1. Francine D. Blau & Lawrence Kahn, 1995. "The Gender Earnings Gap: Some International Evidence," NBER Chapters, in: Differences and Changes in Wage Structures, pages 105-144, National Bureau of Economic Research, Inc.
    2. Freeman, Richard B. & Katz, Lawrence F. (ed.), 1995. "Differences and Changes in Wage Structures," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261607.
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