Trade and wage inequality, mirage or reality?
LIS - Luxembourg
2010
42 p.
level of qualification ; trade ; wage differential
Working Paper Series
533
Wages and wage payment systems
English
Bibliogr.
"In the 2X2X2 Heckscher-Ohlin model there exists a one to one relation between relative good prices and relative factor prices. A change in the relative price of one good changes the relative price of the factor used intensively in the production of the good in the same direction. We review this relation in the context of an analysis of European wage inequality. During the 1980-2000 period wage inequality in Europe increased. However, this movement is not explained by changes in wage differentials by skill level. The education and experience wage premiums remained relatively constant over the sample period. The largest fraction of the increase in wage inequality is accounted by residual inequality."
Digital
The ETUI is co-funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the ETUI.