Global Production Sharing and Rising Inequality: A Survey of Trade and Wages

@article{Feenstra2001GlobalPS,
  title={Global Production Sharing and Rising Inequality: A Survey of Trade and Wages},
  author={R. Feenstra and G. Hanson},
  journal={NBER Working Paper Series},
  year={2001}
}
  • R. Feenstra, G. Hanson
  • Published 2001
  • Economics
  • NBER Working Paper Series
  • We argue that trade in intermediate inputs, or 'global production sharing,' is a potentially important explanation for the increase in the wage gap between skilled and unskilled workers in the U.S. and elsewhere. Using a simple model of heterogeneous activities within an industry, we show that trade in inputs has much the same impact on labor demand as does skill-biased technical change: both of these will shift demand away from low-skilled activities, while raising relative demand and wages of… CONTINUE READING
    814 Citations