American Economic Review Vol. 105 No. 5 2015

Trade Liberalization and the Skill Premium: A Local Labor Markets Approach

Rafael Dix-Carneiro¹; Brian K. Kovak²

¹ Department of Economics, Duke University, 210A Social Sciences Building, Durham, NC 27708 (e-mail: ) · ² Carnegie Mellon University, Heinz College, 4800 Forbes Avenue, HBH 3012, Pittsburgh, PA 15213, and NBER (e-mail: )

Abstract

We develop a specific-factors model of regional economies that includes two types of workers, skilled and unskilled. The model delivers a simple equation relating trade-induced local shocks to changes in local skill premia. We apply the methodology to Brazil's early 1990s trade liberalization and find statistically significant but modest effects of liberalization on the evolution of the skill premium between 1991 and 2010. The methodology uses widely available household survey data and can easily be applied to other countries and liberalization episodes.

DOI

10.1257/aer.p20151052

Volume

105

Issue

5

Pages

551-557

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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