International Trade and American Wages in General Equilibrium, 1967 - 1995

44 Pages Posted: 15 Sep 2000 Last revised: 10 Oct 2010

See all articles by James Harrigan

James Harrigan

University of Virginia - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 1998

Abstract

In the last quarter century, wage inequality has increased dramatically in the United States. At the same time, the US has become more integrated into the world economy prices of final goods have changed, the capital stock has more than doubled has become steadily more educated. This paper estimates a flexible, empirical equilibrium model of wage determination in an attempt to sort out the connections between these trends. Aggregate data on prices and quantities of imports, outputs, and factor supplies are constructed from disaggregate sources. The econometric analysis concludes that wage inequality has been partly driven by changes in relative factor supplies and relative final goods prices. In contrast, imports have played a negligible direct role.

Suggested Citation

Harrigan, James, International Trade and American Wages in General Equilibrium, 1967 - 1995 (June 1998). NBER Working Paper No. w6609; FRB of New York Staff Report No. 46. Available at SSRN: https://ssrn.com/abstract=226331

James Harrigan (Contact Author)

University of Virginia - Department of Economics ( email )

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United States

National Bureau of Economic Research (NBER)

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