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Trade And Skilled-Unskilled Wage Gap In A Model With Differentiated Goods

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  • Thierfelder, Karen
  • Robinson, Sherman

Abstract

There is a continuing debate about whether international trade is responsible for the observed skilled-unskilled wage gap. In this paper we present a general equilibrium trade model with differentiated goods. We begin with an analytical model and show how changes in relative factor returns can be decomposed into changes in commodity prices, changes in the trade balance, and changes in the factor endowment Then we use a computable general equilibrium (CGE) trade model calibrated to the U.S. economy in 1982 to analyze the effects of these shocks, as well as technology changes, observed in the U.S. in the 1980's.

Suggested Citation

  • Thierfelder, Karen & Robinson, Sherman, 2002. "Trade And Skilled-Unskilled Wage Gap In A Model With Differentiated Goods," TMD Discussion Papers 16280, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:iffp23:16280
    DOI: 10.22004/ag.econ.16280
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    References listed on IDEAS

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    1. Jones, Ronald W., 1996. "International trade, real wages, and technical progress: The specific-factors model," International Review of Economics & Finance, Elsevier, vol. 5(2), pages 113-124.
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