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The Skill Bias of the US Trade Deficit

CEPR Discussion Paper No. DP9899

27 Pages Posted: 2 Jun 2014

See all articles by Paolo Epifani

Paolo Epifani

Bocconi University - Department of Economics

Date Written: March 2014

Abstract

We propose a theoretical foundation for a link between North-South trade imbalances and skill upgrading. We provide robust support for our theory using a panel of US manufacturing industries observed between 1977 and 2005. Our results suggest that the impact of the US trade deficit on the relative demand for skills within US industries may dominate that of alternative forces of change, such as trade liberalization, offshoring and technical change.

Keywords: North-South Trade Imbalances, Skill Premia, Skill Upgrading

JEL Classification: F1

Suggested Citation

Epifani, Paolo, The Skill Bias of the US Trade Deficit (March 2014). CEPR Discussion Paper No. DP9899, Available at SSRN: https://ssrn.com/abstract=2444921

Paolo Epifani

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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