Chaging Comparative Advantage and Intra-Industry Trade in Korean Manufacturing Industries

Yong-Yil Choi
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Yong-Yil Choi: Hansung University

Korean Economic Review, 1998, vol. 14, 189-203

Abstract: This paper develops a general equilibrium model for examining the impact of free trade on the wage inequality in the Northern economy and synthesizing the sensitivity of wage inequality indices to changes in causal factors: The model has three types of labor sector-specific high-skilled, mobile unskilled and im-mobile unskilled labor. Thus; three types of wage inequality indices are derived The major findings are first, introducing heterogeneous classes of labor the overall wage inequality of the Northern economy does not necessarily deteriorate with free trade second expenditure shifts for the final good that is produced by high-skill content requirements always lead to a rise in overall wage inequali-ty third the sensitivity of the wage inequality indices to biased technological changes is greatly affected by factor mobility.

Keywords: Free Trade; Wage Inequality Indices; Differentiated Intermediate Goods (search for similar items in EconPapers)
JEL-codes: F10 J31 (search for similar items in EconPapers)
Date: 1998
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