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Title: Trade and Wages Revisited: The Effect of the Chinas MFN Status on the Skill Premium in U.S. Manufacturing

Citation Type: Miscellaneous

Publication Year: 2008

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Abstract: I take advantage of an interesting policy experiment the 1980 U.S. conferral of MostFavored Nation (MFN) status to China to estimate the effect of increased imports from a lessdeveloped country on the U.S. manufacturing wage structure. Previous empirical studies findthat trade has little or no effect on wages in the U.S. However, they all rely on the basic versionof the factor proportions framework (Heckscher-Ohlin) and consequently only expect to findtrade-related changes across industries (e.g. Berman, Bound, and Griliches, 1994). In contrast, Iuse this policy experiment to provide evidence that trade raises the demand for skill and the skillpremium within U.S. manufacturing industries. My findings are consistent with Schott (2004),who reports that U.S. trade data supports factor proportions specialization within, as opposed toacross, industries.

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Authors: Kandilov, Ivan

Publisher: North Carolina State University

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

Countries: China, United States