TRADE-INDUCED SKILL POLARIZATION

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

doi:10.1111/ecin.12834

TRADE-INDUCED SKILL POLARIZATION

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

Economics

Research output: Contribution to journal › Article › peer-review

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 language	English (US)
Pages (from-to)	241-259
Number of pages	19
Journal	Economic Inquiry
Volume	58
Issue number	1
DOIs	https://doi.org/10.1111/ecin.12834
State	Published - Jan 1 2020

ASJC Scopus subject areas

Business, Management and Accounting(all)
Economics and Econometrics

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