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Skill Intensity Reversal and the Rising Skill Premium: Evidence from the U.S. and Mexico

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  • Kurokawa, Yoshinori
Abstract
Rising skill premium in two countries can be explained simply by the Heckscher-Ohlin model assuming a “skill intensity reversal.” This assumption, however, poses an empirical challenge since past research has found little evidence for the so-called “factor intensity reversal.” We now show clear-cut evidence: U.S. net exports to Mexico of electronics products, which were high-skill intensive in the U.S. but low-skill intensive in Mexico, increased from 1994 to 2000. U.S. net imports from Mexico of non-electronics products, which were low-skill intensive in the U.S. but high-skill intensive in Mexico, increased as well. The skill premium then increased in both countries.

Suggested Citation

  • Kurokawa, Yoshinori, 2006. "Skill Intensity Reversal and the Rising Skill Premium: Evidence from the U.S. and Mexico," MPRA Paper 14013, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14013
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    Cited by:

    1. Vincenzo Caponi, 2011. "Intergenerational Transmission Of Abilities And Self‐Selection Of Mexican Immigrants," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 523-547, May.
    2. Sampson, Thomas, 2016. "Assignment reversals: Trade, skill allocation and wage inequality," Journal of Economic Theory, Elsevier, vol. 163(C), pages 365-409.
    3. Yoshinori Kurokawa, 2014. "A Survey Of Trade And Wage Inequality: Anomalies, Resolutions And New Trends," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 169-193, February.

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    More about this item

    Keywords

    Heckscher-Ohlin model; Skill intensity reversal; Rising skill premium; U.S.; Mexico;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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