TRADE-INDUCED SKILL POLARIZATION

Grace W. Gu, Samreen Malik, Dario Pozzoli, Vera Rocha

Research output: Contribution to journalArticle

Abstract

We study how wage gaps across skills and the skill distribution in an economy respond to trade integration. Using administrative data of Denmark (1995–2011), we find that trade has a negative effect on the wage gap between secondary and primary education and a positive effect on the wage gap between tertiary and secondary education. We also show that trade affects skill distribution and induces skill polarization: trade has a positive effect on both the mean and standard deviation of skills. Wage-gap changes induced by trade shocks explain about 21%–30% of the effect of trade on skills.

Original languageEnglish (US)
JournalEconomic Inquiry
DOIs
StateAccepted/In press - Jan 1 2019

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Polarization
Wage gap
Secondary education
Trade integration
Trade shows
Primary education
Administrative data
Standard deviation
Denmark
Tertiary education

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

Cite this

TRADE-INDUCED SKILL POLARIZATION. / Gu, Grace W.; Malik, Samreen; Pozzoli, Dario; Rocha, Vera.

In: Economic Inquiry, 01.01.2019.

Research output: Contribution to journalArticle

Gu, Grace W. ; Malik, Samreen ; Pozzoli, Dario ; Rocha, Vera. / TRADE-INDUCED SKILL POLARIZATION. In: Economic Inquiry. 2019.
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