University of Isfahan International Economics Studies 2008-9643 46 1 2016 01 01 International Capital Movements and Relative Wages: Evidence from U.S. Manufacturing Industries 17 36 22299 10.22108/ies.2016.22299 EN Indro Dasgupta Department of Economics, Southern Methodist University, Dallas, USA Thomas Osang Department of Economics, Southern Methodist University, Dallas, USA Journal Article 2015 09 08 In this paper, we use a multi-sector specific factors model with international capital mobility to examine the effects of globalization on the skill premium in U.S. manufacturing industries. This model allows us to identify two channels through which globalization affects relative wages: effects of international capital flows transmitted through changes in interest rates, and effects of international trade in goods and services transmitted through changes in product prices. In addition, we identify two domestic forces which affect relative wages: variations in labor endowment and technological change. Our results reveal that changes in labor endowments had a negative effect on the skill premium, while the effect of technological progress was mixed. The main factors behind the rise in the skill premium were product price changes (for the full sample period) and international capital flows (during 1982-05).<br />  <br /> <strong>JEL Classification</strong>: F16, J31. https://ies.ui.ac.ir/article_22299_ad05ecad56a619ee99e54998c55e8de4.pdf