Trade, technology, and the channels of wage inequality

Borrs, Linda; Knauth, Florian

doi:10.1016/j.euroecorev.2020.103607

Cited by 19 publications

(14 citation statements)

References 48 publications

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“…After all, the relative changes in wages respond to changes in each worker's labor productivity, the countries' institutional arrangements, and the demand for a qualified labor force [81][82][83]. However, Borrs and Knauth [49] maintain the idea that the different levels of qualification can create greater inequality. The highest quantiles have more technical skills than the lowest quantiles, which is where the disparities are generated.…”

Section: Resultsmentioning

confidence: 99%

“…The industrialization of society is related to greater inequality because of the differences in the productivity of the manufacturing sector compared to the non-manufacturing sector. In a study of China and Europe, the increase in manufacturing was found to promote inequality due to the various skill levels of the population [49].…”

Section: Specialization Export Diversification and Inequalitymentioning

confidence: 99%

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Causal Link between Technological Innovation and Inequality Moderated by Public Spending, Manufacturing, Agricultural Employment, and Export Diversification

et al. 2022

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Sustainable Development Goal 10 (SDG10) proposes the reduction of inequalities. This research highlights the importance of considering short- and long-term mechanisms for designing and applying policies to reduce income inequality. Specifically, we test for the causal link between technological innovation and income inequality using a balanced panel data sample from 73 countries worldwide. The inequality–technological innovation relationship is moderated by public spending, manufacturing, employment in agriculture, and export diversification. We use quantile regression techniques to test the impact of technological innovation on income inequality. The results offer robust empirical evidence that in most quantiles, the impact of technological innovation on inequality is positive. This result suggests that the dark side of technological innovation is that it increases income inequality. Furthermore, we find that government spending reduces inequality across all quantiles, while the effect of employment in agriculture and export diversification is inconclusive. Those responsible for social policy towards the achievement of SDG10 must include the advantages of public spending to reduce social disparities and promote social cohesion within countries.

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Section: Resultsmentioning

confidence: 99%

Section: Specialization Export Diversification and Inequalitymentioning

confidence: 99%

Causal Link between Technological Innovation and Inequality Moderated by Public Spending, Manufacturing, Agricultural Employment, and Export Diversification

et al. 2022

View full text Add to dashboard Cite

show abstract

“…Some researchers, such as Klein, Moser, and Urban [1]; Egger, Egger, and Kreickmeier [2]; and Borrs and Knauth [3], for example, were able to confirm the HOS theory for developed countries.…”

Section: International Trade and Incomementioning

confidence: 99%

“…Klein, Moser, and Urban [1]; Egger, Egger, and Kreickemeier [2]; and Borrs and Knauth [3] found evidence proving the HOS theory. However, some researchers claimed the contrary outcome was observed [4][5][6][7] or concluded that international trade did not exert an influence on income inequality [8].…”

Section: Introductionmentioning

confidence: 98%

An Empirical Approach Analyzing the Socioeconomic Sustainability of the International Sugarcane Trade

Machado

Cruz

2022

Sustainability

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The rapport between international trade and income inequality came to light after the Heckscher–Ohlin/Stolper–Samuelson theorem (HOS). Nevertheless, researchers have not concluded whether the HOS theory truly reflects reality. Even though the main focus provided by the HOS theory is on internal inequality (existing inside the country among its population), another way of analyzing the HOS theory is through income inequality among countries. This last possibility is also called income convergence. This work contributes to the topic of researching the relationship between the export of sugarcane-derived products and income to verify the income convergence effect. The cultivation of sugarcane is a relevant activity for many developing countries, including Brazil. In addition, no developed country is listed among the eight biggest sugarcane producers, which indicates that as a developing country product, it would be possible to analyze the relationship among the variables in a broader sense. The results obtained in the research indicate that the impact of the export of sugarcane products on income is minimal. Although positive, it is only perceived over time. Due to the characteristics of this research, which involves performing an analysis involving green production, green energy, and income inequality, this study is related to the seventh, eighth, and tenth United Nations’ SDG goals.

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“…It is arguably an important area against the background of recent backlashes against globalisation (Collier, 2018). This expanding literature has examined how firms’ import and export affect aspect such as wages (Amiti & Davis, 2012; Borrs & Knauth, 2021; Hummels et al, 2014), matching of firms and workers (e.g. Bombardini et al, 2019; Davidson et al, 2012) and demand for different occupations and skills (e.g.…”

Section: Introductionmentioning

confidence: 99%

International trade and labour market integration of immigrants

Lodefalk

Sjöholm²,

Tang

2022

World Economy

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We examine if international trade improves labor market integration of immigrants in Sweden. Immigrants participate substantially less than natives in the labor market. However, trading with a foreign country is expected to increase the demand for immigrants from that country. By hiring immigrants, a firm may access foreign knowledge and networks needed to overcome information frictions in trade. Using granular longitudinal matched employer-employee data and an instrumental variable approach, we estimate the causal effects of a firm's bilateral trade on employment and wages of immigrants from that country. We find a positive, yet heterogeneous, effect of trade on immigrant employment but no effect on immigrant wages.

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Trade, technology, and the channels of wage inequality

Cited by 19 publications

References 48 publications

Causal Link between Technological Innovation and Inequality Moderated by Public Spending, Manufacturing, Agricultural Employment, and Export Diversification

Causal Link between Technological Innovation and Inequality Moderated by Public Spending, Manufacturing, Agricultural Employment, and Export Diversification

An Empirical Approach Analyzing the Socioeconomic Sustainability of the International Sugarcane Trade

International trade and labour market integration of immigrants

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