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Global Supply Chains and Wage Inequality

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Abstract:

A salient feature of globalization in recent decades is the emergence of “global supply chains” in which different countries specialize in different stages of a sequential production process. In Costinot, Vogel and Wang (2011) (CVW hereafter), we have developed a simple theory of trade with sequential production to shed light on how global supply chains affect the interdependence of nations. In this paper we develop a multi-factor extension of CVW to explore how the emergence of global supply chains may affect wage inequality within countries.

Document Type: Research Article

DOI: http://dx.doi.org/10.1257/aer.102.3.396

Publication date: May 1, 2012

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aea/aer/2012/00000102/00000003/art00069
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