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Impact of International Trade with Asian Newly Industrialized Countries on Wages in the European Union
Author(s) -
Cuyvers Ludo,
Dumont Michel,
Rayp Glenn
Publication year - 2003
Publication title -
asian economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.345
H-Index - 28
eISSN - 1467-8381
pISSN - 1351-3958
DOI - 10.1111/j.1467-8381.2003.00191.x
Subject(s) - economics , wage inequality , wage , newly industrialized country , east asia , european union , international trade , inequality , international economics , labour economics , developing country , political science , china , economic growth , mathematical analysis , mathematics , law
This paper deals with the effect of international trade with newly industrialized countries (NICs) on wage inequality in the European Union (EU). We apply a two‐stage mandated wage‐estimation procedure to assess the respective impact of trade and technology on the relative wages of low‐skilled workers. We find weak evidence of a positive impact on the wages of high‐skilled workers with regards to trade with high‐wage South‐East Asian NICs but no evidence for other groups of NICs. We also find evidence of technological change, induced by trade with high‐wage South‐East Asian NICs. However, this indirect effect of international trade seems to have reduced wage inequality in the EU.