Trade Imbalances, Export Structure and Wage Inequality

Paolo Epifani and Crinò, Rosario
Authors registered in the RePEc Author Service: Rosario Crino

No 9900, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study, both theoretically and empirically, how trade imbalances affect the structure of countries' exports and wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill intensity of exports, in the relative demand for skills and in the skill premium in both countries. We provide robust support for the mechanism underlying these predictions using a large panel of countries observed over the past 30 years. Our results suggest that the large and growing North-South trade imbalances arisen over the last three decades may have exacerbated wage inequality worldwide.

Keywords: North-south trade imbalances; Average skill intensity of exports; Skill premia (search for similar items in EconPapers)
JEL-codes: F1 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (16)

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Journal Article: Trade Imbalances, Export Structure and Wage Inequality (2014)
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