Wage Inequality and Skill Supplies in a Globalised World

Lorenzo Rotunno and Adrian Wood
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Lorenzo Rotunno: GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique

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Abstract: We investigate empirically, and explain theoretically, how the relative wages of skilled and unskilled workers vary with their relative supplies in open economies. Our results resolve a conflict between the predictions of standard trade theory and experience of how labour markets work. We show that relative wages respond to variation in relative skill supplies in countries that trade, as intuition and much other evidence suggest, but also that the wage response decreases as trade barriers fall and that, as trade theory suggests, is weak in very open economies.

Keywords: Heckscher-Ohlin; trade and wages; wage inequality; labour markets (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-int
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01370816v2
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Related works:
Journal Article: Wage inequality and skill supplies in a globalised world (2020)
Working Paper: Wage inequality and skill supplies in a globalised world (2020)
Working Paper: Wage Inequality and Skill Supplies in a Globalised World (2016)
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