Details

Autor(en) / Beteiligte

• Kurokawa, Yoshinori

Titel

Variety-skill complementarity: a simple resolution of the trade-wage inequality anomaly

Ist Teil von

• Economic theory, 2011-02, Vol.46 (2), p.297-325

Ort / Verlag

Berlin/Heidelberg: Berlin/Heidelberg : Springer-Verlag

Erscheinungsjahr

2011

Link zum Volltext

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• The Stolper-Samuelson theorem predicts that the relative wage of high-skilled to low-skilled labor will increase in the high-skill abundant US but decrease in low-skill abundant Mexico after trade liberalization, while it actually began to rise in both countries in the late 1980s. We present a simple resolution of this “trade-wage inequality anomaly” in a model of variety trade. Variety trade increases the variety of intermediate goods used by the final good. If the varieties and high-skilled labor are complements, the skill premium rises in both countries. This linking of imports of new foreign varieties--the extensive margin--to wage inequality is compatible with evidence. Our numerical examples illustrate that small amounts of variety trade can produce a significant increase in relative wage.