Title

Is Trade Liberalization an Important Cause of Increasing U.S. Wage Inequality? The Interaction of Theory and Policy

Document Type

Article

Language

eng

Format of Original

19 p.

Publication Date

12-1999

Publisher

Taylor & Francis (Routledge)

Source Publication

Review of Social Economy

Source ISSN

0034-6764

Abstract

The majority of mainstream economists believe that globalization and trade liberalization have had a minor role in increasing U.S. wage inequality. A minority argues that capital mobility and outsourcing indicate a larger effect. This paper first surveys these views, and then argues that how we understand the policy consequences of trade liberalization helps determine the character of our analysis of the issue itself. Thus, a shift in policy perspective, to consider the "equity costs" of trade liberalization in terms of eroded U.S. labor market institutions, produces a larger framework for analyzing the consequences of globalization and trade liberalization than is available in traditional comparative advantage efficiency reasoning. From this wider perspective, trade liberalization has likely had a greater impact on U.S. wage inequality than even the minority mainstream position allows.

Comments

Review of Social Economy, Vol. 57, No. 4 (December 1999): 488-506. DOI.

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