The role of imports in expanding the demand gap between skilled and unskilled labour in the US

Christis Tombazos ()

Applied Economics, 1999, vol. 31, issue 4, 509-516

Abstract: A unit cost function is employed, in the context of the production theory approach, to estimate the Allen - Uzawa effect of aggregate imports on skilled and unskilled labour in the US. The model corrects for two ubiquitous shortcomings of similar studies: (i) their disregard for the role of nonmanufactured imports, including imports of services, in domestic production, and (ii) their inability to capture, in addition to the conventional domestic-output-substitution effects of the Stolper-Samuelson variety, the impact of imports on the demand for primary factors that is generated via domestic factor-using downstream processes. To circumvent curvature related problems, often associated with similar studies that do not invoke separability, we combine the global imposition of concavity with a symmetric normalized quadratic representation of the unit cost function (that remains flexible after curvature enforcing reparametrizations). The results confirm the notion that imports hurt unskilled labour. However, they also reveal a previously ignored positive impact of aggregate imports on the demand for skilled labour that is qualitatively independent of the measure of skill employed. This result is attributed to skill intensive downstream processes of aggregate imports and reaffirms the importance of 'downstream handling' in stimulating labour demand first identified by Aw and Roberts (Review of Economics and Statistics, 67, 109-17, 1985).

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/000368499324228 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:31:y:1999:i:4:p:509-516

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/000368499324228

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().