Skill, Trade and International Inequality
IDS Working Paper No. 47
Posted: 23 May 1997
Date Written: December 1996
Abstract
Heckscher-Ohlin trade theory suggests that greater openness enlarges inter-country differences in stocks of skill (or human capital), which new growth theory suggests would cause inter-country divergence of per capita incomes. Econometric analysis of data on about 90 countries during 1960-90 confirms that greater openness tends to cause divergence of secondary and tertiary enrollment rates between more-educated and less-educated countries, and also between land-scarce and land-abundant countries. These findings may have implications for the optimal choice of trade policy by poor countries.
JEL Classification: F15, F41, O19
Suggested Citation: Suggested Citation