TRADE, TECHNOLOGY AND LABOR PRODUCTIVITY EFFECTS ON THE DEMAND FOR SKILLED AND UNSKILLED WORKERS: IMPLICATIONS FOR RURAL AREAS

An I/O model of U.S. is used to examine the effects of trade and domestic consumption on the separate and interactive effects of trade, technology, and labor productivity on the demand for skilled and unskilled workers for 1972, 1987, and 1993. The results suggest that trade has not been the major contributor to changes in demand for skilled vs. unskilled labor during the period examined, counter to the continuing debate on theory and on evidence supporting the trade- widening wage gap linkage. We found the ratio of high skilled to low-skilled workers was higher for exports than imports and has risen over time, suggesting that U. S. has moved toward more skilled-labor intensive exports. The effect of trade on rural workers is to reinforce structural trends already working to the disadvantage of rural workers.