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) |
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Pages (from-to) | 241-259 |
Number of pages | 19 |
Journal | Economic Inquiry |
Volume | 58 |
Issue number | 1 |
DOIs | |
State | Published - Jan 1 2020 |
ASJC Scopus subject areas
- General Business, Management and Accounting
- Economics and Econometrics