Trade liberalization and rising wage inequality in Latin America: Reconciliation with HOS theory

• 成果类型: Article
• 署名作者: Atolia, Manoj
• 署名单位: State University System of Florida; Florida State University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2006.06.005
• 发表日期: 2007
• 页码: 467-494
• 关键词: wage inequality; trade reform; HOS; capital-skill complementarity; dynamic analysis

摘要

The paper puts forward the hypothesis that the transitory effects of trade liberalization on wage inequality can differ from the long-run outcome. In cases where the HOS theory predicts a decline in wage inequality in the long run, a temporary rise can, nevertheless, occur due to (i) the asymmetries in the speed of contraction in the import sector and expansion in other sectors, and (ii) the capital-skill complementarity in production. The asymmetric contraction and expansion causes a transitory capital accumulation that boosts the relative and the real wage of skilled labor due to capital-skill complementarity. Although the long-run HOS fundamentals are, therefore, dominated in the short run by the transient effects arising due to capital-skill complementarity, the observed rise in wage inequality is nonetheless consistent with the HOS theory appropriately extended to a dynamic setting. (C) 2006 Elsevier B.V. All rights reserved.