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Is there really no link between international trade and wage differentials?

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  • Lorenzo Corsini

Abstract

This article investigates empirically the relationship between international trade (in particular with non-OECD countries) and wage differentials of workers with different skills. We examine years from 1996 to 2005 in several countries and, whereas past studies (using data from previous years) had not detected any relevant relationship, we find a clean-cut positive effect of imports from non-OECD countries on differentials. In addition, we find evidence that technological change is having a polarization effect on wages.

Suggested Citation

  • Lorenzo Corsini, 2013. "Is there really no link between international trade and wage differentials?," Applied Economics Letters, Taylor & Francis Journals, vol. 20(6), pages 559-565, April.
  • Handle: RePEc:taf:apeclt:v:20:y:2013:i:6:p:559-565
    DOI: 10.1080/13504851.2012.720007
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    1. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
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    4. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
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    6. Paul R. Krugman, 2008. "Trade and Wages, Reconsidered," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 103-154.
    7. 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.
    8. Robert Z. Lawrence, 2008. "Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa85, April.
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