Trade-Induced Structural Change and the Skill Premium

Javier Cravino · Sebastian Sotelo

94 citations0/0 files storedAmerican Economic Journal Macroeconomics

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

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

Abstract

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. International trade also raises real income, which reduces manufacturing employment if services are more income elastic than manufactures. Manufacturing production is unskilled-labor-intensive, so that these changes increase the skill premium. We incorporate these mechanisms in a quantitative trade model and show that reductions in trade costs had a negative impact on manufacturing employment and the relative wage of unskilled workers. (JEL F16, J24, J31, L60)

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 94 citations exist upstream.

References

2019American Economic Review 1992Changes in Relative Wages, 1963-1987: Supply and Demand Factors 2002Technology, Geography, and Trade 1994Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures 2012New Trade Models, Same Old Gains?20061 Distributional Effects of Globalization in Developing Countries*2001Increasing Returns Versus National Product Differentiation as an Explanation for the Pattern of U.S.–Canada Trade 2004Trade reforms and wage inequality in Colombia

Cited by

2020Global Supply Chains in the Pandemic 2021Skill-Biased Structural Change 2019General Equilibrium Effects in Space: Theory and Measurement 2018Evolving comparative advantage, sectoral linkages, and structural change 2021The Distributional Effects of Trade: Theory and Evidence from the United States 2020Trade, inequality, and the endogenous sorting ofheterogeneous workers

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.