Recent perspectives on trade and inequality

By Ann E. Harrison, J. McLaren, Margaret S. McMillan. 2011

267 citations recorded by the source corpus.

The 1990's dealt a blow to traditional Heckscher-Ohlin analysis of the relationship between trade and income inequality, as it became clear that rising inequality in low-income countries and other features of the data were inconsistent with that model. As a result, economists moved away from trade as a plausible explanation for rising income inequality. In recent years, however, a number of new mechanisms have been explored through which trade can affect(and usually increase) income inequality. These include within-industry effects due to heterogeneous?firms; effects of offshoring of tasks; effects on incomplete contracting; and effects of labor-market frictions. A number these mechanisms have received substantial empirical support.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/2da8d0df6112dec96c57fe0d057f6e6ea5a52941

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Citations in the corpus

The Arrival of Fast Internet and Employment in Africa (2019, background): “The slow economic progress of poor workers in many parts of Africa, Asia, and Latin America during the last few decades therefore surprised economists.”
The Impact of Chinese Import Competition on the Local Structure of Employment and Wages: Evidence from France (2017, methodology): “For instance Harrison et al. (2011), in their review of recent theoretical and empirical works on trade and within-country inequality, do not cite any papers looking at the impact of globalization on the distribution of wages using the empirical approach used here.”
Does economic globalisation affect income inequality? A meta‐analysis (2020, background): “Several qualitative reviews show that academic scholars have contributed to a rapidly growing literature (e.g. Burtless 1995; Ravallion 2003; Winters et al. 2004; Anderson 2005; Demirguc-Kunt and Levine 2009; Mills 2009; Nissanke and Thorbecke 2010; Harrison et al. 2011; de Haan and Sturm 2017).”
Recent trends in inequality and poverty in developing countries (2013, background): “The theoretical channels linking these changes to inequality are multiple and complex, which accounts for the lack of conclusive empirical results (Wood, 1997; Rama, 2003; Winters et al., 2004; Anderson, 2005; Goldberg and Pavcnik, 2007; Harrison et al., 2011).”
Offshoring and Labor Markets (2018, background): “For more discussions, see the surveys by Harrison, McLaren, and McMillan (2011) and Antras and Yeaple (2014).”
Ecology, trade and states in pre-colonial Africa (2014, background): “Though recent trade models argue that trade increases inequality by raising incomes of abundant factors, increasing skill premia, and through search frictions in import-competing sectors (Harrison et al., 2011), these are of limited relevance to pre-industrial societies.”
The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade (2016, unknown): “…to the predictions of textbook trade models, manufacturing industries in developed countries appeared to be substituting toward high-skill workers despite rising skill prices, 1 For formal surveys of the literature on trade and wages, see Feenstra & Hanson (2003) and Harrison et al. (2011).”