My paper topic idea is to look at the intersection of Stolper-Samuelson and the benefits of international trade for US workers. Essentially if unskilled workers are the scare factor in Stolper-Samuelson then their wages should have gone down and they would be worse off. Evidence from the past few decades confirms that in labor markets composed mainly of manufacturing industries that compete with China wages have gone down (Autor, Dorn, and Hanson). However, there’s also evidence that trade, mainly with China, has reduced the prices of goods that comprise the majority of lower class’ budget, and that this decrease in prices has actually made them better off than before (Broda and Romalis) . It’s unclear if the effect of lower wages or lower prices is larger. Essentially I am interested in looking at the effects of Chinese trade (and international trade) on inequality in the US.
For alternate ideas, Professor Anderson says I can use his Indian data for a project, but I am still unfamiliar with it and don’t have any ideas for what I would do with it. It would make doing 399 much more feasible. I am open to other ideas on macro policies and international development.
Autor, Dorn, and Hanson-http://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.103.6.2121
Broda and Romalis-http://www.etsg.org/ETSG2008/Papers/Romalis.pdf
Dani Rodrik blog post on the idea-http://rodrik.typepad.com/dani_rodriks_weblog/2008/06/stolper-samuelson-for-the-real-world.html