Trade and wages in Colombia

Donald Robbins

Estudios de Economia, 1997, vol. 24, issue 1 Year 1997, 47-83

Abstract: This paper examines the impacts of real devaluation, trade liberalization and the growing relative supply of skill on wage dispersion in Colombia’s seven principal cities over 1976-1994. The Hecksher-Ohlin-Samuelson(HOS) framework predicts that while labor supply shifts and devaluation should not affect wage dispersion, trade liberalization should compress wages in LDC’s. My findings differ: growth in the supply of skills lowers, and liberalization and real devaluation raise, wage dispersion. This is not due to failure of the HOS assumptions of factor-diversified trade or that Colombia is skilled relative to the world average. The data are consistent with non-HOS assumptions where devaluation and liberalization encourage capital and embodied technical flows.

Keywords: Real devaluation; trade liberalization; Colombia. (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:udc:esteco:v:24:y:1997:i:1:p:47-83

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