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Free Trade and Wage Inequality in an Advanced Economy

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  • Yong-Yil Choi

Abstract

This paper develops a formal model for examining the impact of free trade on the wage inequality in the Northern economy and the sensitivity of wage inequality indices to changes in causal factors within a general equilibrium setting. The model has three types of labor: sector-specific high-skilled, mobile unskilled and immobile unskilled labor. Thus, three types of wage inequality indices are derived. Selected comparative statics for changes in consumer expenditure shares, biased technological changes, changes in relative endowments are provided. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Yong-Yil Choi, 1998. "Free Trade and Wage Inequality in an Advanced Economy," Open Economies Review, Springer, vol. 9(4), pages 349-359, October.
    • Handle: RePEc:kap:openec:v:9:y:1998:i:4:p:349-359
    DOI: 10.1023/A:1008317515602
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    References listed on IDEAS

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    1. Adrian Wood, 1997. "How Trade Hurt Unskilled Workers," Palgrave Macmillan Books, in: Jitendralal Borkakoti & Chris Milner (ed.), International Trade and Labour Markets, chapter 7, pages 140-168, Palgrave Macmillan.
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    4. 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.
    5. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, Decembrie.
    6. 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, President and Fellows of Harvard College, vol. 109(2), pages 367-397.
    7. 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), March.
    8. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
    9. repec:aei:rpbook:52903 is not listed on IDEAS
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