We study the effect of the bilateral trade integration with China on wage inequality in Brazil. Previous studies have documented the contribution of trade opening to the decline in inequality since the 1990s, driven primarily by cross-firm pay differences. We find a sharper reduction in wage...

This paper studies how and why the bilateral trades in manufacturing and services differ in their response to changes in the determinants—both theoretically and empirically. We build a unified theoretical framework that incorporates a demand bias towards services and a difference in the degree...