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GTAP Resource #1983

"Searching for the Smoking Gun: Did Trade Hurt Unskilled Workers?"
by Winchester, Niven

The link between increased North-South trade and the deteriorating relative position of unskilled workers in developed nations has been the subject of a large number of empirical studies in recent decades. We contribute to this literature by conducting the first computable general equilibrium (CGE) evaluation of the association between the two events in New Zealand - a small, open economy that experienced a significant change in trade policy in the early 1980s. We find that increased imports since 1980 caused only a marginal increase in wage inequality in New Zealand and, overall, increased trade (both imports and exports) decreased wage inequality in this nation. We interpret these results as convincing evidence that trade is not responsible for increases in wage inequality in developed nations.

JEL classification: F16, J24

Keywords: trade and wages; skill classification

Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Date: 2006
Created: Winchester, N. (4/25/2006)
Updated: Winchester, N. (12/19/2006)
Visits: 3,156
No keywords have been specified.

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