Policy Implications of the Trade and Wages Debate

Alan Deardorff

Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: This paper examines the choice of policies to redistribute income in response to an increase in inequality caused by a rise in the differential wage paid to skilled labor compared to unskilled labor. The main issue is whether the appropriate policy response depends on the cause of the increased differential. In particular, should policies respond any differently if the rising differential is due to "trade" -shorthand for greater openness in global markets and/or greater participation in those markets by developing countries abundantly endowed with unskilled labor - or due to technological changes that have favored skilled labor over unskilled labor.

Keywords: TRADE; WAGES (search for similar items in EconPapers)
JEL-codes: D30 F10 F13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1999
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Citations: View citations in EconPapers (3)

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Journal Article: Policy Implications of the Trade and Wages Debate (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:mie:wpaper:440

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