Footnote:
In: Journal of Economic Surveys, Vol. 22, Issue 3, pp. 409-457, July 2008
Description:
We review the skill-biased technological change (SBTC) versus NorthSouth trade (NST) debate in order to explain widening wage inequality between skilled and unskilled workers. The traditional explanations based on exogenous SBTC and on the NorthSouth Heckscher Ohlin Samuelson approach, as well as the early estimates that diagnosed a clear prevalence of the former, are firstly exposed and discussed. A presentation is then made of the recent theoretical literature that endogenizes SBTC, introduces new channels of impacts from NST, and combines both explanations. Finally, the current estimates show that (i)both explanations are relevant; (ii)their impacts differ according to industries and countries; (iii)outsourcing is the main vector of impact from NST and (iv) SBTC and NST interact