Income Inequality and Trade: How to Think, What to Conclude

J. David Richardson

383 citations0/0 files storedThe Journal of Economic Perspectives

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Labor market dynamics and wage inequality Global trade and economics Economic Theory and Policy

Abstract

Recent econometric work and growing analytical consensus suggest that exogenous international market pressures are a contributing factor to trends in U.S. wage/earnings inequality. Trade accounts for a share of these inequality trends close to or somewhat greater than its 10-15 percent share of economic activity, especially over medium-term horizons and dependent on precise definition. Trade is neither a trivial influence nor a dominant one. Evidence exists that its influence has declined slightly in the past decade, however. Rapid technological growth in exportable sectors seems more important.

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References

1994Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures 1992U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations 1995Growing World Trade: Causes and Consequences 1994North-South trade, employment and inequality: changing fortunes in a skill-driven world 1991Immigration, Trade, and the Labor Market 1994The Growth of Earnings Instability in the U.S. Labor Market 1993International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?1992Exporting Jobs?: The Impact of Import Competition on Employment and Wages in U. S. Manufacturing

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