Wage Differential, Trade, Productivity Growth and Education
There is a large literature on the link between wage differential, international trade and productivity growth. The theoretical and empirical research is mainly based on the Heckscher-Ohlin-Samuelson framework and on the cases of a large country. More comprehensive theoretical models are needed to guide further empirical research. This paper contributes to the debate by providing a dynamic intertemporal general equilibrium (DIGE) model incorporating endogenous skill formation. The result tends to support the argument that trade has a responsibility for wage differential. A cut in government education investment tends to raise wage differential. Productivity growth at best causes wage differential in the short run. From a theoretical perspective it is unclear whether productivity growth raises wage differential in the long run once the accumulation of skills is endogenized.
|Date of creation:||Nov 1999|
|Contact details of provider:|| Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601|
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: https://crawford.anu.edu.au/acde/publications/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- TURRINI, Alessandro, "undated".
"Endogenous education policy and increasing income inequality between skilled and unskilled workers,"
CORE Discussion Papers RP
1322, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Turrini, Alessandro, 1998. "Endogenous education policy and increasing income inequality between skilled and unskilled workers," European Journal of Political Economy, Elsevier, vol. 14(2), pages 303-326, May.
- Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc.
- Paul Krugman, 1995.
"Technology, Trade, and Factor Prices,"
NBER Working Papers
5355, National Bureau of Economic Research, Inc.
- Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
- Stephen Nickell & D. Nicolitsas, 1994.
LSE Research Online Documents on Economics
51644, London School of Economics and Political Science, LSE Library.
- Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
- Bhagwati, Jagdish N. & Srinivasan, T. N., 1977.
"Education in a `job ladder' model and the fairness-in-hiring rule,"
Journal of Public Economics,
Elsevier, vol. 7(1), pages 1-22, February.
- J. N. Bhagwati & T. N. Srinivasan, 1975. "Education in a 'Job Ladder' Model and the Fairness-in-Hiring Rule," Working papers 159, Massachusetts Institute of Technology (MIT), Department of Economics.
- Edward E. Leamer, 1992. "Testing Trade Theory," NBER Working Papers 3957, National Bureau of Economic Research, Inc.
- McKibbin, Warwick J. & Wilcoxen, Peter J., 1998.
"The theoretical and empirical structure of the G-Cubed model,"
Elsevier, vol. 16(1), pages 123-148, January.
- W. J. McKibbin & P. J. Wilcoxen, "undated". "The Theoretical and Empirical Structure of the G-Cubed Model," Discussion Papers 118, Brookings Institution International Economics.
- McKibbin, W.J. & Wilcoxen, P.J., 1995. "The Theoretical and Empirical Structure of the G-Cubed Model," Papers 118, Brookings Institution - Working Papers.
- Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, December.
- Chen, Been-Lon & Hsu, Mei, 2001. "Time-Series Wage Differential in Taiwan: The Role of International Trade," Review of Development Economics, Wiley Blackwell, vol. 5(2), pages 336-354, June.
- Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
- Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
- Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), January.
- Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
- Phillip L Swagel & Matthew J. Slaughter, 1997. "The Effect of Globalization on Wages in the Advanced Economies," IMF Working Papers 97/43, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:pas:papers:2000-01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sandra Zec)
If references are entirely missing, you can add them using this form.