SWA2014-Wages | Table 4.29 | Impact of trade with low-wage countries on college/noncollege wage gap

Change
1973 1979 1989 1995 2000 2007 2011 1979–1995 1995–2011 1979–2011
Manufacturing trade penetration (as share of GDP)*
Less-developed country (LDC) trade 1.0% 1.8% 2.5% 3.6% 4.6% 5.6% 6.4% 1.8 2.8 4.7
China trade 0.0 0.0 0.2 0.5 0.8 1.8 2.0 0.5 1.6 2.0
College/noncollege wage gap**
36.9% 28.9% 41.5% 46.1% 48.2% 49.2% 50.9% 17.2 4.8 22.0
Estimated impact of trade on college/noncollege wage gap
All LDC trade 1.6% 2.7% 4.0% 5.6% 7.3% 8.8% 10.0% 2.9 4.4 7.3
China trade*** 0.0 0.0 0.3 0.7 1.2 2.8 3.2 0.7 2.5 3.2
Trade share of college/noncollege wage gap Percent of change
All LDC trade 4.3% 9.5% 9.5% 12.1% 15.0% 17.9% 19.7% 16.7% 93.4% 33.2%
China trade*** 0.0 0.1 0.6 1.6 2.5 5.7 6.3 4.1 51.6 14.4

* "Penetration" is the average of the import share and the trade share to reflect current imbalance but also impact of balanced trade.

** Log hourly wage differential between those with a college or advanced degree and all other workers

*** Based on China share of LDC trade share, which assumes China trade impact equals other LDC trade impact

Source: Update of Bivens (2008) reanalysis of Krugman (1995) computable general equilibrium model

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