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A Production Theory Approach to the Imports and Wage Inequality Nexus

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  • Christis G. Tombazos

    (Department of Economics, Monash University, Clayton, Victoria 3800, Australia.)

Abstract

I employ a production theory approach to investigate the effect of fluctuations in the prices of imports of different origin on the wage differential between skilled and unskilled labor in the United States. Unlike competing methodologies, the employed framework of analysis accounts for the economy-wide effects of imports that derive from both domestic output substitution as well as downstream production. The results of this study suggest that the overall impact of imports, including those that originate in less developed economies, on the wage differential is negligible. Economy-wide dynamic processes of capital accumulation and technical change appear to play a far more important role in wage dispersion. Copyright 2003, Oxford University Press.

Suggested Citation

  • Christis G. Tombazos, 2003. "A Production Theory Approach to the Imports and Wage Inequality Nexus," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 42-61, January.
    • Handle: RePEc:oup:ecinqu:v:41:y:2003:i:1:p:42-61
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    Citations

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    Cited by:

    1. Jaai Parasnis, 2010. "Estimating The Relationship Between Immigrant And Native Workers In Australia: A Production Theory Approach," Australian Economic Papers, Wiley Blackwell, vol. 49(1), pages 73-85, March.
    2. Elie Appelbaum & Ulrich Kohli, 1997. "Import Price Uncertainty And The Distribution Of Income," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 620-630, November.
    3. Guy Chapda Nana & Bruno Larue, 2014. "Imposing curvature conditions on flexible functional forms for GNP functions," Empirical Economics, Springer, vol. 47(4), pages 1411-1440, December.
    4. Tarjáni, Hajnalka, 2006. "A technológiai fejlődés és a kereskedelem hatása a szakképzettségi prémiumra [Analysing the impacts of technological development and trade on the skill premium in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 226-234.
    5. Chapda Nana, Guy & Larue, Bruno, 2012. "Imposing Curvature Conditions on Flexible Functional Forms to GNP Functions," Working Papers 123308, University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE).
    6. Alexander Hijzen & Peter Wright, 2010. "Migration, trade and wages," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1189-1211, September.
    7. Hajnalka Tarjani, 2005. "Estimating some labour market implications of skill biased technology change and imports in Hungary," CERS-IE WORKING PAPERS 0508, Institute of Economics, Centre for Economic and Regional Studies.
    8. Christis G. Tombazos, 2010. "Trade and Wage Inequality in a World of Incomplete Diversification," Chapters, in: Noel Gaston & Ahmed M. Khalid (ed.), Globalization and Economic Integration, chapter 8, Edward Elgar Publishing.
    9. Huy Quang Vu, 2012. "Imports and the demand for skilled and unskilled labour - the Australian experience," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 15(1), pages 37-55.

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