Global Supply Chains and Wage Inequality

Arnaud Costinot, Jonathan Vogel and Su Wang

American Economic Review, 2012, vol. 102, issue 3, 396-401

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 Costinot, Vogel and 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.

Date: 2012
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