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Oxford Economic Papers 56 (2004), 231-241
© Oxford University Press 2004; All rights reserved

The effect of trade on earnings—evidence from Swedish micro data

Per-Anders Edin*, Peter Fredriksson{dagger},, and Per Lundborg{ddagger}

* IFAU, NBER, and Department of Economics, Uppsala University; e-mail: per-anders.edin{at}nek.uu.se
{dagger} IFAU and Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden; e-mail: peter.fredriksson{at}nek.uu.se
{ddagger} Trade Union Institute for Economic Research and Gothenburg University; e-mail: p.lundborg{at}fief.se

Using a large longitudinal data set, we study the effects of increased trade on earnings in the Swedish labor market. Earnings respond significantly to changes in industry sales, whether generated by domestic market forces or international trade: Swedish exports (imports) raise (lower) annual earnings, but changes in trade affect earnings just as any other shift in market conditions. We also examine whether the effects of trade vary by skill. We do not find systematic differences in the effects of trade across the skill distribution.


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