Year: 2013
Type: article
Abstract: Trade openness influences the wage structure via technology adoption in middle income countries. Given the econometric challenges of handling endogenous trade and technology interaction, we offer an alternative quantification based on calibration of a general equilibrium model. We expand the standard open economy Ramsey model to include comparative advantage, technology adoption and skill bias influenced by investment decisions. The calibration constructs a reference path for South Africa and allows counterfactual analysis of trade openness. The quantitative results imply that trade effects via technology adoption and skill bias can be an important determinant of wage inequality in middle income countries.
DOI: 10.1111/roie.12045
Authors: Jørn Rattsø, Hildegunn E. Stokke
Institution: Norwegian University of Science and Technology
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W2153544622