Trade and the Wage Structure in the Presence of Price Differentials in the Product Market: The Japanese Labor Market 1965-1990.

Abstract

The decomposition of demand into domestic, export, and import components in a cross-industry study of 18 two-digit manufacturing industries suggests that export growth has less of an impact on interindustry wage differentials than the equivalent growth in domestic demand. The difference seems to be greatest in the case of full-time workers in large firms. This result for Japan is different from those of similar studies for the United States and is consistent with a model of industry rent-sharing with domestic-international price differentials in the product market