Tracking Wage Inequality Trends with Prices and Different Trade Models : Evidence from Mexico

Halliday, Timothy ; Lederman, Daniel ; Robertson, Raymond

World Bank, Washington, DC

关键词: TARIFFS;    FREE TRADE AGREEMENT;    IMPERFECT SUBSTITUTES;    PRODUCTION;    SKILLED WORKERS;   

DOI  :  10.1596/1813-9450-7471
RP-ID  :  WPS7471

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Mexican wage inequality rose followingMexicos accession to the General Agreement on Tariffs andTrade/World Trade Organization in 1986. Since the mid-1990s,however, wage inequality has been falling. Since most trademodels suggest that output prices can affect factor prices,this paper explores the relationship between output pricesand wage inequality. The rise of inequality can be explainedby the evolution of the relative price of skill-intensivegoods relative to unskilled-intensive goods, but theseprices flattened by 1999 and thus cannot explain thesubsequent decline in wage inequality. An alternative trademodel with firm heterogeneity driven by variations in therelative price of tradable relative to non-tradable goodscan explain the decline in wage inequality. The papercompares this model’s predictions with Mexican inequalitystatistics using data on output prices, census data, andquarterly household survey data. In spite of the modelssimplicity, the model’s predictions match Mexican variablesreasonably well during the years when wage inequality fell.