Changes in the labor markets of the developed countries since 1970s have been the subject of extensive empirical analysis. Moreover, Wood (1997) investigated relationship between openness and wage inequality in devel...
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Changes in the labor markets of the developed countries since 1970s have been the subject of extensive empirical analysis. Moreover, Wood (1997) investigated relationship between openness and wage inequality in developing countries, especially the Latin American countries, and argued that one major reason responsible for deterioration in wage inequality in the Latin American countries since openness is China’s strong growth in labor-intensive goods in world market share. However, Lardy (2003) points out that the benefit from openness of China’s huge domestic market should not be ignored and the impacts of China’s growth and openness might be *** this thesis the opening and rapid expansion of China is examined for its effects on East Asian economies. Since 1979, China has changed her trade policy regime in favor of “outward orientation”. This “opening up” has been associated with substantial growth in exports and with a shift in the composition of those exports away from products intensive in natural resources toward labor intensive manufactures. Our concern is to explore the effects of these developments on wage inequality within the East Asian countries. For our empirical assessment we use the database (Version 6.0) and model formulation of the GTAP (Global Trade Analysis Project) multi-sector multi-region applied general equilibrium model where labor is disaggregated by skill level. Simulation results shows a tendency toward increasing skilled-labor-unskilled-labor wage ratios in all countries except Japan and the trend is enhanced by the combination of openness and growth in China. The rising relative wages between skilled and unskilled workers (0.08%) in Taiwan seems to be consistent with the stylized fact of the increase in the relative wage after 1995. Hong Kong and South Korea show similar pattern with 0.44% and 0.04% increase in the relative wages between skilled and unskilled workers. However, the impacts are not so significant
This paper provides a thorough examination of the ongoing trade pattern among Taiwan, Korea, Japan and China. We observed trade among these four countries pair-wisely and segregate trade pattern into inter-industry tr...
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This paper provides a thorough examination of the ongoing trade pattern among Taiwan, Korea, Japan and China. We observed trade among these four countries pair-wisely and segregate trade pattern into inter-industry trade and two-way trade, or intra-industry trade (IIT). Further efforts are made by disentangling such trade into horizontal IIT (HIIT) and vertical IIT (VIIT). The results show that although one-way trade still dominates most trade types among these four countries, IIT is growing in importance. Additionally, we adopted a multi-sector computable general equilibrium model to simulate the potential impacts on Taiwan’s economy if Korea, Japan, and China form a Free Trade Agreement (FTA) with Taiwan being left out. Considering Taiwan's response to Japan-Korea-China FTA, the simulation of direct sailing between Taiwan and China is also implemented. As for the simulation, we use the GTAP (Global Trade Analysis Project) model and its newly released version 6.0 database. Simulation results show that the impacts of a FTA on GDP and welfare of member countries are generally positive, while the impacts on non-members are negative. In the case of Taiwan, the reaction of direct sailing somewhat increases GDP and welfare of Taiwan comparing to Taiwan’s situation in scenario 1 although GDP and welfare are still negative.
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