In Search of Stolper-Samuelson Linkages between International Trade and Lower Wages
Edward E. Leamer
WITH THE widening of the gap between wages of unskilled and skilled workers has come an intense effort by economists on both sides of the Atlantic to identify the cause. The top three suspects are education, technology, and international trade. Most casual observers hold the opinion that all three of these suspects are guilty. The public schools in the United States seem to be doing a poorer job preparing their graduates for the job market and have been adding to the supply of unskilled, ill-prepared workers. On the demand side, technological change is altering the nature of work. Many functions are being technologically transferred from unskilled to skilled workers (for example, typing this manuscript), while others are being downgraded to require the most minimal level of education (for example, clerking at McDonald's). Last of the three suspects is international trade.
The work presented in this chapter was partially supported by NSF Grant SBR-9409011. The assistance of Christopher Thornberg, Robert Murdock, and Nadia Soboleva is gratefully acknowledged. I have benefited much from the comments of the discussants ( Gene Grossman and Steve Davis) and the editor ( Susan Collins), and from comments of participants at seminars at Dartmouth and Columbia, particularly Ronald Findlay.