IDEAS home Printed from https://ideas.repec.org/p/pas/papers/2000-01.html
   My bibliography  Save this paper

Wage Differential, Trade, Productivity Growth and Education

Author

Listed:
  • Chang, Hsaio-chuan

Abstract

There is a large literature on the link between wage differential, international trade and productivity growth. The theoretical and empirical research is mainly based on the Heckscher-Ohlin-Samuelson framework and on the cases of a large country. More comprehensive theoretical models are needed to guide further empirical research. This paper contributes to the debate by providing a dynamic intertemporal general equilibrium (DIGE) model incorporating endogenous skill formation. The result tends to support the argument that trade has a responsibility for wage differential. A cut in government education investment tends to raise wage differential. Productivity growth at best causes wage differential in the short run. From a theoretical perspective it is unclear whether productivity growth raises wage differential in the long run once the accumulation of skills is endogenized.

Suggested Citation

  • Chang, Hsaio-chuan, 1999. "Wage Differential, Trade, Productivity Growth and Education," Departmental Working Papers 2000-01, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2000-01
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2000/Chang%202000.01.pdf
    File Function: File-Size (KB): 101KB
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edward E. Leamer, 1992. "Testing Trade Theory," NBER Working Papers 3957, National Bureau of Economic Research, Inc.
    2. repec:bla:rdevec:v:5:y:2001:i:2:p:336-54 is not listed on IDEAS
    3. Turrini, Alessandro, 1998. "Endogenous education policy and increasing income inequality between skilled and unskilled workers," European Journal of Political Economy, Elsevier, vol. 14(2), pages 303-326, May.
    4. 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.
    5. 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.
    6. McKibbin, Warwick J. & Wilcoxen, Peter J., 1998. "The theoretical and empirical structure of the G-Cubed model," Economic Modelling, Elsevier, vol. 16(1), pages 123-148, January.
    7. 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.
    8. Nickell, Stephen & Nicolitsas, D., 1994. "Wages," LSE Research Online Documents on Economics 51644, London School of Economics and Political Science, LSE Library.
    9. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
    10. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, April.
    11. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
    12. Bhagwati, Jagdish N. & Srinivasan, T. N., 1977. "Education in a `job ladder' model and the fairness-in-hiring rule," Journal of Public Economics, Elsevier, vol. 7(1), pages 1-22, February.
    13. 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.
    14. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    15. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155.
    16. Mr. Phillip L Swagel & Mr. Matthew J. Slaughter, 1997. "The Effect of Globalization on Wages in the Advanced Economies," IMF Working Papers 1997/043, International Monetary Fund.
    17. Edward E. Leamer, 1992. "Wage Effects of A U.S. - Mexican Free Trade Agreement," NBER Working Papers 3991, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hsiao-chuan Chang, 2002. "Do Foreign Workers Have An Adverse Effect On The Native Unskilled Labor In Taiwan?," Department of Economics - Working Papers Series 837, The University of Melbourne.
    2. Hsiao-chuan Chang, 2002. "Are Foreign Workers Responsible For The Increasing Unemployment Rate In Taiwan?," Department of Economics - Working Papers Series 853, The University of Melbourne.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yong-Yil Choi, 1998. "Free Trade and Wage Inequality in an Advanced Economy," Open Economies Review, Springer, vol. 9(4), pages 349-359, October.
    2. R. E. Baldwin & G. G. Cain, "undated". "Shifts in U.S. Relative Wages: The Role of Trade, Technology, and Factor Endowments," Institute for Research on Poverty Discussion Papers 1132-97, University of Wisconsin Institute for Research on Poverty.
    3. Rita A. Balaban & James Harrigan, 1999. "U.S. wages in general equilibrium: the effects of prices, technology and factor supplies, 1963-1991," Staff Reports 64, Federal Reserve Bank of New York.
    4. Catherine L. Mann, 1997. "Globalization and productivity in the United States and Germany," International Finance Discussion Papers 595, Board of Governors of the Federal Reserve System (U.S.).
    5. Daniel Trefler, 1997. "Immigrants and Natives in General Equilibrium Trade Models," NBER Working Papers 6209, National Bureau of Economic Research, Inc.
    6. Suryahadi, A. & Chen, P. & Tyers, R., 1999. "Openness, Technological Change and Labor Demand in Pre-Crisis Indonesia," Papers 377, Australian National University - Department of Economics.
    7. Paul Segerstrom & Elias Dinopoulos, 1999. "A Schumpeterian Model of Protection and Relative Wages," American Economic Review, American Economic Association, vol. 89(3), pages 450-472, June.
    8. V A Muscatelli., 1995. "Flexibility, Structural Change and the Global Economy," Working Papers 9601, Business School - Economics, University of Glasgow, revised Jan 1996.
    9. Jonathan E. Haskel, 2000. "Trade and Labor Approaches to Wage Inequality," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 397-408, August.
    10. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    11. Lars Calmfors & Giancarlo Corsetti & Michael P. Devereux & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2008. "Chapter 3: The effect of globalisation on Western European jobs: curse or blessing?," EEAG Report on the European Economy, CESifo, vol. 0, pages 71-104, February.
    12. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
    13. Daniel Traca & Pushan Dutt, 2005. "Trade and the skill-bias: it's not how much, but with whom you trade," Working Papers CEB 05-010.RS, ULB -- Universite Libre de Bruxelles.
    14. Nahuis, R., 1997. "On Globalisation, Trade and Wages," Research Memorandum 747, Tilburg University, School of Economics and Management.
    15. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
    16. Thierfelder, Karen & Robinson, Sherman, 2002. "Trade and the skilled-unskilled wage gap in a model with differentiated goods," TMD discussion papers 96, International Food Policy Research Institute (IFPRI).
    17. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.
    18. Jolanda Peeters & Albert de Vaal, 2003. "Explaining the Wage Gap: Intra-Industry Trade, Services Linkages and Falling Transportation Costs," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(3), pages 251-280, December.
    19. Olivier Cortès & Sébastien Jean & Jean Pisani-Ferry, 1996. "Trade with Emerging Countries and the Labour Market: The French Case," Working Papers 1996-04, CEPII research center.
    20. Baldwin, John R. & Raffiquzzaman, Mohammed, 1998. "The Effect of Technology and Trade on Wage Differentials Between Nonproduction and Production Workers in Canadian Manufacturing," Analytical Studies Branch Research Paper Series 1998098e, Statistics Canada, Analytical Studies Branch.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pas:papers:2000-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prema-chandra Athukorala (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.