Trade-induced Skill Polarization

Grace W Gu, Samreen Malik, Dario Pozzoli, Vera Rocha

Research output: Contribution to journalJournal articleResearchpeer-review

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 languageEnglish
JournalEconomic Inquiry
Volume58
Issue number1
Pages (from-to)241-259
Number of pages19
ISSN0095-2583
DOIs
Publication statusPublished - Jan 2020

Bibliographical note

Published online: 02 September 2019

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