Chapter

Skill Differentials and Inequality in the South

Adrian Wood

in North-South Trade, Employment and Inequality

Published in print July 1995 | ISBN: 9780198290155
Published online November 2003 | e-ISBN: 9780191597015 | DOI: http://dx.doi.org/10.1093/0198290152.003.0006

Series: IDS Development Studies

 Skill Differentials and Inequality in the South

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In the South, theory suggests that expansion of trade in manufactures with the North tends to raise the demand for—and hence the wages of—workers with a basic general education, relative to workers who have more education and training, and hence to make the distribution of income less unequal. This theoretical prediction is supported, though not strongly, by cross‐country statistical comparisons. It is also supported by simulations using structural models of particular developing countries, and by case study evidence from Korea, Taiwan, Hong Kong, and Singapore. None of these types of evidence is satisfactory on its own, but in combination they are convincing.

Keywords: demand; distribution; education; income; models; trade; wages

Chapter.  15344 words.  Illustrated.

Subjects: International Economics

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