Can Inter-Industry Wage Differentials Justify Strategic Trade Policy?

Lawrence Katz and Lawrence H. Summers

No 2739, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the relationship between labor market imperfections and trade policies. The available evidence suggests that pervasive industry wage differentials of up to 20 percent remain even after controlling for differences in observed measures of workers' skill and the effects of unions. Theoretical analysis indicates that given non-competitive wage differentials of this magnitude policies directed at encouraging employment in high-wage sectors could significantly enhance allocative efficiency. For the United States and other developed countries, such policies are more likely to involve export promotion than import substitution. Increased international trade flows (at least through 1984) have been associated with increased employment in high-wage U.S. manufacturing industries relative to low-wage U.S. manufacturing industries.

Date: 1988-10
Note: ITI LS IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Published as Can Interindustry Wage Differentials Justify Strategic Trade Policy? , Lawrence F. Katz, Lawrence H. Summers. in Trade Policies for International Competitiveness , Feenstra. 1989

Downloads: (external link)
http://www.nber.org/papers/w2739.pdf (application/pdf)

Related works:
Chapter: Can Interindustry Wage Differentials Justify Strategic Trade Policy? (1989)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2739

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2739

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().