Working Paper: CEPR ID: DP2476
Authors: Jonathan Haskel
Abstract: We compare the trade and labour approaches to wage inequality. We first look at the theoretical differences, stressing the different roles ascribed to sector and factor bias, labour supply and the theory of technical change in trade models with endogenous prices. We then briefly review some of the evidence on the sector bias of prices and technology.
Keywords: wage inequality; technical change; stolper-samuelson effects
JEL Codes: F16; J31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased openness to international trade (F69) | decline in unskilled wages (F66) |
| technical change (O39) | changes in the relative demand for skilled versus unskilled labor (F66) |
| sector bias in technological advancements (O33) | wage changes (J31) |
| trade liberalization (F13) | changes in wages across different sectors (J31) |
| sector shifts due to trade (F19) | changes in relative demand for skilled and unskilled labor (F66) |
| technical change (O39) | increased productivity of skilled workers (J24) |