Globalization, Roundaboutness, and Relative Wages

Arbeitspapier

We depart from the trade and wages literature and its emphasis on North-South trade, examining North-North by developing the basic linkages between trade-based integration and relative wages in an Ethier-type division of labor model. Using this model we identify a formal relationship between international trade, productivity, and wages. We then examine the trivariate relationship between trade, growth in total factor productivity (TFP), and the skill premium in a vector autoregression framework. We find evidence of a long-run relationship between growth in intermediate goods and changes in TFP. Controlling for this relationship we also find a positive relationship between trade and the skill-premium.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 04-021/2

Classification and Topics

• Classification: Wirtschaft ; Trade and Labor Market Interactions ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
• Subject: trade and wages ; globalization ; division of labor ; monopolistic competition ; intra-industry trade ; Internationale Wirtschaft ; Internationale Arbeitsteilung ; Lohn ; Produktivität ; Monopolistischer Wettbewerb ; Globalisierung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Francois, Joseph ; Grier, Kevin ; Nelson, Douglas
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/86574
• Last update: 10.03.2025, 11:42 AM CET