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Journal Articles Oxford Economic Papers Year : 2005

Trade, services and wage inequality


We develop a simple endogenous growth model with two countries, North that innovates, and South. As in Dinopoulos and Segerstrom (1999), trade liberalization raises wage inequality through stimulating R&D activity. However, the consequences of North-South trade become ambiguous when a service sector protected against international competition is included in the model. The key result is that, if the weight of service in final consumption is large enough, then trade could result in a reduction of wage inequality.

Dates and versions

halshs-00754054 , version 1 (20-11-2012)



Philippe Askenazy. Trade, services and wage inequality. Oxford Economic Papers, 2005, 57 (4), pp.674-692. ⟨10.1093/oep/gpi026⟩. ⟨halshs-00754054⟩
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