Trade and Labor usage: An examination of the Stopler-Samuelson theorem for the South African manufacturing industryJohannes Wolfgang Fedderke (), Yongcheol Shin () and P Vaze ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh Abstract: This paper advances on previous work on the effects of trade on labour markets as identified by the Stolper-Samuelson theorem in three respects. First, we employ dynamic heterogeneous panel estimation techniques, which allows to investigate both (possibly homogeneous) long-run relationship and (possibly heterogeneous) short-run dynamics simultaneously. Second, we consider evidence from a middle income country with abundant unskilled labor. Third, we investigate Stolper-Samuelson effects in both price and quantity dimension. We find that output prices increase most strongly in sectors that are labor intensive. In particular, trade has mandated positive earnings increases for both labor and capital, though increases are greater for labour, while technology has mandated negative earnings increases for both labor and capital. Given these results, growth of real wage rates are a plausible explanation of the high and sustained levels of unemployment in South African labor markets. Keywords: Trade Liberalization; Labor Demand; Total Factor Productivity; Stolper-Samuelson Theorem; Dynamic Heterogeneous Panel; Mandated Regression (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:edn:esedps:33 Access Statistics for this paper More papers in ESE Discussion Papers from Edinburgh School of Economics, University of Edinburgh |
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