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Trade and Wages: Choosing among Alternative Explanations
January 1995Volume 1, Number 1
JEL classification: F11, J30
Author: Jagdish Bhagwati
North-South trade competition cannot be an explanation for the adverse trend for U.S. unskilled wages. If wage competition in these industries from abroad pushed down wages, then prices of these goods should also have gone down, and they have not. Also VERs and anti-dumping measures have protected exactly the wage earners supposedly threatened.