Glen G. Cain
Institutional Affiliation: University of Wisconsin
NBER Working Papers and Publications
|February 1997||Shifts in U.S. Relative Wages: The Role of Trade, Technology and Factor Endowments|
with Robert E. Baldwin: w5934
This paper investigates three hypotheses to account for the observed shifts in U.S. relative wages of less educated compared to more educated workers between 1967 and 1992: increased import competition, changes in the relative supplies of labor of different education levels and changes in technology. Our analysis relies on a basic relation of the standard general equilibrium trade model that relates changes in product prices to factor price changes and factor shares, and information about changes in the composition of output, trade, within-industry factor use and factor supplies. We conclude that the relative increase in the supply of well educated labor from 1967-1973 was the dominant force that narrowed the wage gap among workers of different education levels. The gap continued to narrow...
Published: Baldwin, Robert E. and Glen G. Cain. "Shifts In Relative U.S. Wages: The Role Of Trade, Technology, And Factor Endowments," Review of Economics and Statistics, 2000, v82(4,Nov), 580-595.