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Technology, Trade, and Increasing Inequality: Does the Cause Matter for the Cure?

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  • Deardorff, A.V.

Abstract

This paper addresses an issue that has received a great deal of attention in recent years, both from international trade economists and from labor economists: What has caused the relative wage of skilled labor compared to unskilled labor in the United States to increase through the 1980s and 1990s? Prime candidates for causing this change have been "trade" - the increased competition of U.S. workers with unskilled workers abroad - and "technology" - new products and processes that may have increased the productivity of skilled workers or skill-intensive industries relative to their unskilled counterparts. The paper reviews what has happened to relative wages and the explanations that have been suggested. A brief look at the empirical evidence from this literature is suggestive, but hardly conclusive. But the paper then asks whether the answer to this question really matters.

Suggested Citation

  • Deardorff, A.V., 1998. "Technology, Trade, and Increasing Inequality: Does the Cause Matter for the Cure?," Working Papers 428, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:428
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    Cited by:

    1. Michel Dumont, 2006. "Foreign Outsourcing, Labour Demand and the Choice of Functional Form," Journal of Applied Economics, Taylor & Francis Journals, vol. 9(2), pages 255-273, November.
    2. Naoko Shinkai, 2000. "Does the Stopler-Samuelson Theorem Explain the Movement in Wages? The Linkage Between Trade and Wages in Latin American Countries," Research Department Publications 4237, Inter-American Development Bank, Research Department.
    3. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    4. Jonathan E. Haskel, 2000. "Trade and Labor Approaches to Wage Inequality," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 397-408, August.
    5. Yanhua Chen & Suqiong Wei & Hongou Zhang & Yuehua Gao, 2019. "Spatiotemporal Evolution of the Taiwanese-Funded Information Technology and Electronics Industry Value Chain in Mainland China," Sustainability, MDPI, vol. 11(11), pages 1-18, June.
    6. Zeddies, Götz, 2010. "International Trade Patterns and Labor Markets – An Empirical Analysis for EU Member States," IWH Discussion Papers 15/2010, Halle Institute for Economic Research (IWH).
    7. Anuradha Roy & Ricardo Leiva, 2008. "Testing of a Structures Covariance Matrix for Three-Level Repeated Measures Data," Working Papers 0037, College of Business, University of Texas at San Antonio.
    8. Dumont, Michel, 2004. "The Impact of International Trade with Newly Industrialised Countries on the Wages and Employment of Low-Skilled and High-Skilled Workers in the European Union," Thesis Commons bmxag, Center for Open Science.
    9. Naoko Shinkai, 2000. "¿Explica el teorema Stopler-Samuelson el desplazamiento de los salarios? El vínculo entre el comercio internacional y los salarios en países latinoamericanos," Research Department Publications 4238, Inter-American Development Bank, Research Department.
    10. Hamid Beladi & Avik Chakrabarti, 2008. "Moving People or Jobs? A New Perspective on Immigration and International Outsourcing," Working Papers 0041, College of Business, University of Texas at San Antonio.

    More about this item

    Keywords

    TRADE ; WAGES;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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