Protection, Trade, and Wages: Evidence from U.S. Manufacturing

Noel G. Gaston · Daniel Trefler

115 citations0/0 files storedIndustrial and Labor Relations Review

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Global trade and economics Historical Economic and Social Studies Labor market dynamics and wage inequality

Abstract

This paper investigates the effects of international trade policy on wages in U.S. manufacturing industries in 1983. The data set combines micro labor market data with comprehensive data on tariffs and nontariff trade barriers such as quotas and antidumping duties. The authors find that workers in unprotected, export-oriented industries had higher wages than workers with similar observable characteristics in protected, import-competing industries; more specifically, exports had a positive wage effect and imports had a smaller negative wage effect. Other findings are that nontariff barriers had no significant effect on wages, and tariffs appear to have had a large negative wage effect, even after the authors control for the trade protection received by low-wage industries.

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References

1941Protection and Real Wages 1988Efficiency Wages and the Inter-Industry Wage Structure 1992Wage bargaining and employment 1983A ‘reciprocal dumping’ model of international trade 1991Immigration, Trade, and the Labor Market 1991Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority 1993Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy 1992Exporting Jobs?: The Impact of Import Competition on Employment and Wages in U. S. Manufacturing

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