English, Article edition: Foreign Trade and Wages Peter Huber; Yvonne Wolfmayr-Schnitzer

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/65930
Physical Description
  • article
Language
  • English

Edition details

Title
  • Foreign Trade and Wages
Author
  • Peter Huber
  • Yvonne Wolfmayr-Schnitzer
Physical Description
  • article
Notes
  • A survey of the relevant literature finds that no really satisfactory answer is yet available on the issue of how important foreign trade really is for labour market developments. European studies have (with some exceptions) arrived at the conclusion that foreign trade has little impact on wages; yet actual findings were very much dependent on the methods used and periods observed. At the current state of discussions, no rule of thumb of the sort "foreign trade has increased wage differentials by x percent" can be given. Similarly, no secure findings can be obtained for unemployment and job rates. Available results of empirical studies need to be considered in the light of the dispute between foreign trade economists and labour economists over the proper method to measure foreign trade effects on wages. This dispute revolves around three major issues: 1. Which reference model should be used for analysis: a labour market model based on partial equilibrium analysis or a general equilibrium model based on foreign trade theory? The latter describes long-term relationships and assumes free intersectoral mobility of the labour force. Import pressure in one sector causes redundant labour to move into another sector. Any change in the labour supply is thus fully absorbed by output shifts between sectors. Wages remain unchanged for as long as such output shifts do not cause any change in domestic prices for the goods, such as would be the case in a small open economy (which acts as a pure price taker on the global market). 2. Does foreign trade impact on domestic wages through the trade volume or through price shifts? While labour market approaches usually start out from import and export volumes, such an assumption is not valid from the point of view of the Heckscher-Ohlin foreign trade theory. Even when import and export volumes are very small, they may critically affect the labour market if firms scale down their prices to the global market price in consequence of trade liberalisation. 3. How can results be checked for other possible factors influencing the wage differential between high- and low-skilled workers (technological progress, shortcoming in the education system, etc.)? Available studies in Austria are based on the labour market theory and have arrived on – occasionally – highly divergent results, which are summarised in the survey. No empirical studies based on foreign trade theory have so far been carried out.
  • Außenhandel und Löhne. Ein Literaturüberblick; Foreign Trade and Wages
  • RePEc:wfo:monber:y:2000:i:3:p:197-210
Language
  • English
Contributed by
OAIster

Get this edition

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment