Trade Liberalization and Wage Inequality: Evidence from the U.S. States

Xiaofeng Penny Li ()
Additional contact information
Xiaofeng Penny Li: International School of Economics and Management, Capital University of Economics and Business, Beijing 100070, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2015, vol. 10, issue 3, 527-539

Abstract: This paper examines the relationship between trade liberalization and wage inequality for 50 U.S. states during the period from 1999 to 2008. The Difference-in-Differences and fixed effects methods are employed to evaluate the effect of trade liberalization on wage inequality in the U.S. states. Empirical results reveal that trade liberalization and de-unionization do increase the wage inequality between skilled and unskilled workers. Evidence shows skill-biased technological change has no significant impact on rising wage inequality. As Difference-in-Differences estimation on time-series cross sectional data involves many years, the conventional standard errors often understate the standard deviation of the estimators. This paper employs the standard bootstrapping procedure and the clustering error procedure to correct the problem, and all sign patterns still hold.

Keywords: trade liberalization; wage inequality; skill-biased technological change; de-unionization (search for similar items in EconPapers)
JEL-codes: F22 J31 J43 J5 J61 R23 R58 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.3868/s060-004-015-0023-9 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:10:y:2015:i:3:p:527-539

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().