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GTAP Resource #1172

"The Differential Impact of the South on Wage Inequality in the North"
by Lejour, Arjan and Paul Tang

This paper explores the potential future impact of globalisation on relative wages, using WorldScan.
The focus is on wage inequality in Japan, Western Europe and the United States. Inequality rises for
several reasons: barriers to trade fall, and in developing countries demand patterns change and at the
same time workers shift from traditional low-productivity toward modern high-productivity activities.
Even though inequality does not rise dramatically, one should not ignore the characteristics of the
growth process in developing countries: trade liberalisation is not only reason behind growing
inequality. Another interesting result is the different impact on industrialized countries. Simulations
show that the United States is least sensitive to falling trade barriers and changes in developing
countries. The impact on Japan and Western Europe is larger.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: CPB research memorandum 167
Date: 1999
Created: Lejour, A. (2/6/2003)
Updated: Dimaranan, B. (2/6/2003)
Visits: 1,879
- Economic growth
- Labor market issues
- Asia (East)
- Europe (Western)
- North America

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