Trade Induced Structural Change and the Skill Premium / Javier Cravino, Sebastian Sotelo.

Format:

Book

Author/Creator:

Cravino, Javier.

Contributor:

National Bureau of Economic Research.

Sotelo, Sebastian.

Series:

Working Paper Series (National Bureau of Economic Research) no. w23503.

NBER working paper series no. w23503

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufacturing employment if manufactures and services are complements. We document that manufacturing production is unskilled-labor intensive, so that these changes increase the skill-premium. We incorporate this mechanism in a quantitative trade model and show that trade has had a negative impact on manufacturing employment and the relative wage of unskilled workers. The impact on the skill premium was larger in developing countries where manufacturing is particularly unskilled-labor intensive.

Notes:

Print version record

June 2017.