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Trade, services and wage inequality

Author

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  • Philippe Askenazy

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)

Abstract

We develop a simple endogenous growth model with two countries, North that innovates, and South. As in Dinopoulos and Segerstrom (1999), trade liberalization raises wage inequality through stimulating R&D activity. However, the consequences of North-South trade become ambiguous when a service sector protected against international competition is included in the model. The key result is that, if the weight of service in final consumption is large enough, then trade could result in a reduction of wage inequality.

Suggested Citation

  • Philippe Askenazy, 2005. "Trade, services and wage inequality," Post-Print halshs-00754054, HAL.
    • Handle: RePEc:hal:journl:halshs-00754054
    DOI: 10.1093/oep/gpi026
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    Cited by:

    1. Petit, Sylvain, 2016. "International trade in services and inequalities: Empirical evaluation and role of tourism services," MPRA Paper 75206, University Library of Munich, Germany.
    2. Nathalie Chusseau & Michel Dumont & Joël Hellier, 2008. "Explaining Rising Inequality: Skill‐Biased Technical Change And North–South Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 409-457, July.
    3. Nicolas Fleury & Sylvain Petit & Aurélie Cassette, 2012. "Income inequalities and international trade in goods and services: short and long-run evidence," Post-Print hal-01831503, HAL.
    4. Songtao Wang & Tristan Kenderdine & Zhen Qi, 2017. "Working for Less: Income Inequality and the Diminishing Share of Labor in China’s National Wealth," Asian Social Science, Canadian Center of Science and Education, vol. 13(6), pages 1-81, June.

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