TRADE AND SKILLED-UNSKILLED WAGE GAP IN A MODEL WITH DIFFERENTIATED GOODS

Karen Thierfelder and Sherman Robinson

No 16280, TMD Discussion Papers from CGIAR, International Food Policy Research Institute (IFPRI)

Abstract: There is a continuing debate about whether international trade is responsible for the observed skilled-unskilled wage gap. In this paper we present a general equilibrium trade model with differentiated goods. We begin with an analytical model and show how changes in relative factor returns can be decomposed into changes in commodity prices, changes in the trade balance, and changes in the factor endowment Then we use a computable general equilibrium (CGE) trade model calibrated to the U.S. economy in 1982 to analyze the effects of these shocks, as well as technology changes, observed in the U.S. in the 1980's.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 49
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iffp23:16280

DOI: 10.22004/ag.econ.16280

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