Working Paper: CEPR ID: DP9899
Authors: Rosario Crin; Paolo Epifani
Abstract: We propose a theoretical foundation for a link between North-South trade imbalances and skill upgrading. We provide robust support for our theory using a panel of US manufacturing industries observed between 1977 and 2005. Our results suggest that the impact of the US trade deficit on the relative demand for skills within US industries may dominate that of alternative forces of change, such as trade liberalization, offshoring and technical change.
Keywords: north-south trade imbalances; skill premia; skill upgrading
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| southern trade surplus (F14) | skill upgrading in south (J24) |
| southern trade surplus (F14) | skill upgrading in north (J24) |
| trade deficit (F14) | relative demand for skills (J29) |
| trade deficit (F14) | wagebill share of nonproduction workers (J39) |
| trade deficit (F14) | skill upgrading (J24) |