TY - JOUR
T1 - Trade, technology, and the labour market
T2 - impacts on wage inequality within countries
AU - Wang, Wenxiao
AU - Findlay, Christopher
AU - Thangavelu, Shandre
N1 - Publisher Copyright:
© 2021 Crawford School of Public Policy,The Australian National University and John Wiley & Sons Australia, Ltd
PY - 2021/5
Y1 - 2021/5
N2 - This paper focuses on the widening wage inequality between skilled and unskilled workers within countries and discusses whether trade and technology have contributed to this trend. The paper develops an analytical framework for wage inequality that traces the determinants and their relative roles in wage inequality in different stages of the development of trade theory, especially those considering new evidence after 2011. We find that technology plays a key role in the rise of wage inequality in most countries, while trade plays an increasingly crucial and more complex role in recent years. Skill supply institutions, such as education systems supplying skilled labour or unions participating in wage-setting processes, suppress the rise of wage inequality in some countries. The paper further outlines the mechanisms through which trade affects wage inequality, including offshoring, firm heterogeneity, labour market frictions and global value chains. We find that trade has indirect effects on technology, which further enlarges the wage inequality among skills. The paper also discusses the policy implications of the impacts of trade and technology on wage inequality.
AB - This paper focuses on the widening wage inequality between skilled and unskilled workers within countries and discusses whether trade and technology have contributed to this trend. The paper develops an analytical framework for wage inequality that traces the determinants and their relative roles in wage inequality in different stages of the development of trade theory, especially those considering new evidence after 2011. We find that technology plays a key role in the rise of wage inequality in most countries, while trade plays an increasingly crucial and more complex role in recent years. Skill supply institutions, such as education systems supplying skilled labour or unions participating in wage-setting processes, suppress the rise of wage inequality in some countries. The paper further outlines the mechanisms through which trade affects wage inequality, including offshoring, firm heterogeneity, labour market frictions and global value chains. We find that trade has indirect effects on technology, which further enlarges the wage inequality among skills. The paper also discusses the policy implications of the impacts of trade and technology on wage inequality.
UR - http://www.scopus.com/inward/record.url?scp=85100935383&partnerID=8YFLogxK
U2 - 10.1111/apel.12313
DO - 10.1111/apel.12313
M3 - Article
SN - 0818-9935
VL - 35
SP - 19
EP - 35
JO - Asian-Pacific Economic Literature
JF - Asian-Pacific Economic Literature
IS - 1
ER -