Journal of Economic Perspectives: Vol. 9 No. 3 (Summer 1995)


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Income Inequality and Trade: How to Think, What to Conclude

Article Citation

Richardson, J David. 1995. "Income Inequality and Trade: How to Think, What to Conclude." Journal of Economic Perspectives, 9(3): 33-55.

DOI: 10.1257/jep.9.3.33


Recent econometric work and growing analytical consensus suggest that exogenous international market pressures are a contributing factor to trends in U.S. wage/earnings inequality. Trade accounts for a share of these inequality trends close to or somewhat greater than its 10-15 percent share of economic activity, especially over medium-term horizons and dependent on precise definition. Trade is neither a trivial influence nor a dominant one. Evidence exists that its influence has declined slightly in the past decade, however. Rapid technological growth in exportable sectors seems more important.

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Richardson, J. David (Maxwell School, Syracuse U)

JEL Classifications

J31: Wage Level and Structure; Wage Differentials
F14: Country and Industry Studies of Trade
J21: Labor Force and Employment, Size, and Structure


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