STOLPER-SAMUELSON (LOST) IN THE TROPICS TRADE LIBERALIZATION AND WAGES IN COLOMBIA: 1976-1994

Donald Robbins

No 294380, Harvard Institute for International Development (HIID) Papers from Harvard University, Kennedy School of Government

Abstract: This paper examines the impacts of real devaluation, trade liberalization and the growing relative supply of skill on wage dispersion in Colombia's seven principal cities over 1976-1994. The Hecksher-Ohlin-Samuelson (HOS) framework predicts that while labor supply shifts and devaluation should not affect wage dispersion, trade liberalization should compress wages in LDC's. My findings differ: growth in the supply of skills lowers, and liberalization and real devaluation raise, wage dispersion. This is not due to failure of the HOS assumptions of factor-diversified trade or that Colombia is skilled relative to the world average. The data are consistent with non-HOS assumptions where devaluation and liberalization encourage capital and embodied technical flows.

Keywords: Institutional and Behavioral Economics; Labor and Human Capital (search for similar items in EconPapers)
Pages: 47
Date: 1996-12
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:hariid:294380

DOI: 10.22004/ag.econ.294380

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