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Widening wage inequality in the US and other developed countries in the West has been the focus of academic debates since the 1990s among economists, especially in the field of labor economics and international economics. Studies to date seem to have narrowed down the causes to two major factors: technological change and globalization. Since these factors are generally witnessed in the developed countries, they must have some potential impact on Japan. The objective of this book is to investigate how and to what extent international trade widens wage inequality in the Japanese manufacturing labor market, both theoretically and empirically. Specifically, the book estimates the effect of trade between 1995 and 2005 on the relative wages of skilled to unskilled labor, represented by nonproduction to production workers and college graduates to high school graduates, by calculating the factor content of trade of 55 or 20 manufacturing industries. The estimation reveals that trade was partly responsible for the widening wage inequality in the Japanese manufacturing labor market, although the effect of the trade was not dominant.
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