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Is a Skill Intensity Reversal a Mere Theoretical Curiosum? Evidence from the U.S. and Mexico

  • Yoshinori Kurokawa

A rising skill premium in two countries can be explained by the Heckscher-Ohlin model assuming a "skill intensity reversal." This assumption, however, poses an empirical challenge since past research has found little evidence for the so-called "factor intensity reversal." We now show clear-cut evidence for the existence of a skill intensity reversal.

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Paper provided by Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba in its series Tsukuba Economics Working Papers with number 2009-010.

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Date of creation: Jun 2009
Date of revision:
Handle: RePEc:tsu:tewpjp:2009-010
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  1. Daron Acemoglu, 1999. "Patterns of Skill Premia," NBER Working Papers 7018, National Bureau of Economic Research, Inc.
  2. Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
  3. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
  4. Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
  5. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
  6. Yoshinori Kurokawa, 2009. "Variety-Skill Complementarity: A Simple Resolution of the Trade-Wage Inequality Anomaly," Tsukuba Economics Working Papers 2009-007, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  7. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
  8. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
  9. John R. Moroney, 1967. "The Strong-Factor-Intensity Hypothesis: A Multisectoral Test," Journal of Political Economy, University of Chicago Press, vol. 75, pages 241.
  10. Raymond Robertson, 2006. "Globalization and Mexican labor markets," Proceedings, Federal Reserve Bank of Dallas, pages 61-80.
  11. 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.
  12. Dinopoulos, Elias & Segerstrom, Paul, 1996. "A Schumpeterian Model of Protection and Relative Wages," Working Paper Series 471, Research Institute of Industrial Economics.
  13. Esquivel, Gerardo & Rodriguez-Lopez, Jose Antonio, 2003. "Technology, trade, and wage inequality in Mexico before and after NAFTA," Journal of Development Economics, Elsevier, vol. 72(2), pages 543-565, December.
  14. Hanson, G.H. & Harrison, A., 1995. "Trade, Technology and Wage Inequality," Papers 95-20, Columbia - Graduate School of Business.
  15. Deborah Swenson & Robert Feenstra & Gordon H. Hanson, 2003. "Offshore Assembly From The United States: Production Characteristics Of The 9802 Program," Working Papers 9810, University of California, Davis, Department of Economics.
  16. Eli Bekman & John Bound & Stephen Machin, 1998. "Implications of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1245-1279.
  17. Selin Sayek & Fuat Sener, 2006. "Outsourcing and Wage Inequality in a Dynamic Product Cycle Model," Review of Development Economics, Wiley Blackwell, vol. 10(1), pages 1-19, 02.
  18. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  19. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers 11375, Iowa State University, Department of Economics.
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