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Trade and the 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 the role of changes in trade on the evolution of relative wages particularly the skilled-unskilled wage gap. In the 1980's, the wage gap widened considerably in the United States, and there was an active literature on the roles of trade, technology, and changes in labor supplies, particularly due to migration and education, in explaining these changes. The empirical models used to analyze the links fall into two broad groups: (1) partial-equilibrium models of the labor market, focusing on changes in the supply and demand of labor by skill category, and (2) general equilibrium trade models linking domestic factor returns to changes in world prices and the composition of trade....In this paper, we present a theoretical model that can capture many of the differences between the approaches of trade and labor economists." from Authors' Introduction.

Suggested Citation

  • Thierfelder, Karen & Robinson, Sherman, 2002. "Trade and the skilled-unskilled wage gap in a model with differentiated goods," TMD discussion papers 96, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:tmddps:96
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    Cited by:

    1. Stephen Tokarick, 2005. "Quantifying the Impact of Trade on Wages: the Role of Nontraded Goods," Review of International Economics, Wiley Blackwell, vol. 13(5), pages 841-860, November.
    2. Ayodele, Olumide S. & Obafemi, Frances N., 2006. "Fiscal and Quasi-Fiscal Effects of the Parallel Exchange Premium in Nigeria," Conference papers 331503, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Niven Winchester, 2008. "Trade and Rising Wage Inequality: What Can We Learn from a Decade of Computable General Equilibrium Analysis?," Palgrave Macmillan Books, in: David Greenaway & Richard Upward & Peter Wright (ed.), Globalisation and Labour Market Adjustment, chapter 4, pages 54-72, Palgrave Macmillan.
    4. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1645-1718, Elsevier.

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