Chart Detail

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

Updated May 17, 2012

Documentation and methodology

Table is an update of Bivens’s (2008) reanalysis of Krugman (1995) using 2011 data.

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