Is The Level Of Development Significant For The Theory Of Factor Price Equalization?

Abstract

The vast part of the literature on wages and employment in global markets focuses on international trade considerations and on industrialized countries, often leaving aside developing countries’ experiences. The scope of this paper is to examine wages and employment in global markets from a different perspective: we try to combine international trade considerations (trade liberalization) with domestic factors in developing countries. The main idea behind this approach is that the level of development and the complementarity between skilled and unskilled labor are crucial to understand changes in employment and the wage gap.