Trade, Wages, and Superstars
Paolo Manasse and
Alessandro Turrini ()
No 2262, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We study the effect of 'globalization' on wage inequality. Our 'global' economy resembles Rosen's (1981) 'Superstars' economy, where a) innovations in production and communication technologies enable suppliers to reach a larger mass of consumers and to improve the (perceived) quality of their products and b) trade barriers fall. When transport costs fall, income is redistributed away from the non-exporting to the exporting sector of the economy. As the former turns out to employ workers of higher skill and pay, the effect is to raise wage inequality. Whether the least skilled stand to lose or gain from improved production or communication technologies, in contrast, depends on whether technology is skill-complementary, or a substitute. The model gives an intuitive explanation for the empirical regularities that skill intensity, market size and wages tend to be positively associated with exporting activity across sectors and plants.
Keywords: International Trade; Technological Change; Wage Inequality (search for similar items in EconPapers)
JEL-codes: F12 F16 J31 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
Journal Article: Trade, wages, and 'superstars' (2001)
Working Paper: Trade, Wages and Superstars (1999)
Working Paper: Trade, Wages and "Superstars"
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2262
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2262
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().