Journal
ECONOMIC INQUIRY
Volume 58, Issue 1, Pages 241-259Publisher
WILEY
DOI: 10.1111/ecin.12834
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Funding
- Carlsberg Foundation [CF-300664]
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We study how wage gaps across skills and the skill distribution in an economy respond to trade integration. Using administrative data of Denmark (1995-2011), we find that trade has a negative effect on the wage gap between secondary and primary education and a positive effect on the wage gap between tertiary and secondary education. We also show that trade affects skill distribution and induces skill polarization: trade has a positive effect on both the mean and standard deviation of skills. Wage-gap changes induced by trade shocks explain about 21%-30% of the effect of trade on skills.
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