American Economic Review: Vol. 102 No. 3 (May 2012)


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Global Supply Chains and Wage Inequality

Article Citation

Costinot, Arnaud, Jonathan Vogel, and Su Wang. 2012. "Global Supply Chains and Wage Inequality." American Economic Review, 102(3): 396-401.

DOI: 10.1257/aer.102.3.396


A salient feature of globalization in recent decades is the emergence of "global supply chains" in which different countries specialize in different stages of a sequential production process. In Costinot, Vogel and Wang (2011) (CVW hereafter), we have developed a simple theory of trade with sequential production to shed light on how global supply chains affect the interdependence of nations. In this paper we develop a multi-factor extension of CVW to explore how the emergence of global supply chains may affect wage inequality within countries.

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Costinot, Arnaud (MIT)
Vogel, Jonathan (Columbia U)
Wang, Su (MIT)

JEL Classifications

J31: Wage Level and Structure; Wage Differentials
L14: Transactional Relationships; Contracts and Reputation; Networks
M11: Production Management
F16: Trade and Labor Market Interactions
F23: Multinational Firms; International Business

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