Global Supply Chains and Wage Inequality

Arnaud Costinot, Jonathan Vogel and Su Wang

No 17976, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A salient feature of globalization in recent decades is the emergence of "global supply chains" in which different countries specialize in different stages of a sequential production process. In Arnaud Costinot, Jonathan Vogel and Su Wang (2011), CVW hereafter, we have developed a simple theory of trade with sequential production to shed light on how global supply chains affect the interdependence of nations. In this paper we develop a multi-factor extension of CVW to explore how the emergence of global supply chains may affect wage inequality within countries. Our main theoretical prediction is that the emergence of global supply chains has opposite effects on wage inequality among workers employed at the bottom and the top of these chains. This suggests that the consequences of globalization on wage inequality may be very different in primary sectors like agriculture or mining than in manufacturing sectors.

JEL-codes: F1 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-int and nep-lab
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Published as Arnaud Costinot & Jonathan Vogel & Su Wang, 2012. "Global Supply Chains and Wage Inequality," American Economic Review, American Economic Association, vol. 102(3), pages 396-401, May.

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Journal Article: Global Supply Chains and Wage Inequality (2012)
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