Market Interconnection and Wages
We study the impacts of terms trade changes on absolute and the real wages of skilled and unskilled labor and their gaps for an economy specialized in export production. We show an interesting result where wage behavior as well as the skilled-unskilled wage gap depend on elasticity of import demand, unlike in 3x2 classical-neoclassical speci c-factor model of trade. Although, our analysis is in the spirit of Stolper-Samuelson theorem, given the structure of our model, factor intensity plays no role in our results as in the speci c-factor model.
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- Alan V. Deardorff, 2004.
"A Trade Theorist’s Take on Skilled-Labor Outsourcing,"
519, Research Seminar in International Economics, University of Michigan.
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- Batra, Ravi, 1992. "The Fallacy of Free Trade," Review of International Economics, Wiley Blackwell, vol. 1(1), pages 19-31, November.
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- Hamid Beladi & Ravi Batra, 2004. "Traded and Nontraded Goods and Real Wages," Review of Development Economics, Wiley Blackwell, vol. 8(1), pages 1-14, 02.
- Reza Oladi & Hamid Beladi, 2008. "Non-traded Goods, Technical Progress and Wages," Open Economies Review, Springer, vol. 19(4), pages 507-515, September.
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