Competition, trade and wages

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Title: Competition, trade and wages
Authors: Neary, J. Peter
Permanent link: http://hdl.handle.net/10197/1277
Date: 5-Jun-2001
Abstract: I briefly review the empirical evidence in the trade and wages debate, which overwhelmingly rejects the Heckscher-Ohlin explanation for recent increases in OECD skill premia. I then argue that the same evidence is also difficult to reconcile in general equilibrium with the view that exogenous skill-biased technological progress is the sole culprit. Finally, I present a model of oligopolistic competition which is more consistent with the evidence. Removing quantitative import constraints (a metaphor for increased foreign competition) encourages both home and foreign firms to invest more aggressively, raising their demand for skilled labour even at unchanged relative wages.
Funding Details: The Economic and Social Research Council (ESRC)
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP00/20
Keywords: OECD wage inequalityOligopolistic competitionSkill-biased technological progressSkill premiaTrade and wages
Subject LCSH: Wage differentials--OECD countries
Competition, Imperfect
Labor--OECD countries
International trade
Other versions: http://www.ucd.ie/economics/research/papers/2000/WP00.20.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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