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Is Trade Liberalization An Important Cause Of Increasing U.S. Wage Inequality? The Interaction Of Theory And Policy, John B. Davis
Is Trade Liberalization An Important Cause Of Increasing U.S. Wage Inequality? The Interaction Of Theory And Policy, John B. Davis
Economics Faculty Research and Publications
The majority of mainstream economists believe that globalization and trade liberalization have had a minor role in increasing U.S. wage inequality. A minority argues that capital mobility and outsourcing indicate a larger effect. This paper first surveys these views, and then argues that how we understand the policy consequences of trade liberalization helps determine the character of our analysis of the issue itself. Thus, a shift in policy perspective, to consider the "equity costs" of trade liberalization in terms of eroded U.S. labor market institutions, produces a larger framework for analyzing the consequences of globalization and trade liberalization than is …