Revisiting the Trade-Wage Structure Nexus: A Micro Analysis for Turkey

This paper analyses the impact of international trade on wages in Turkey using individual-level data. It explicitly accounts for differences in the destination and origin of trade flows as well as their composition. The results suggest that only imports of inputs from developed countries have a positive effect on wages. This effect is higher for high-skilled labour, supporting the skill-enhancing trade hypothesis. While exports to developing countries positively affect wages, especially for low-skilled labour, exports to developed countries exert downward pressure on wages, pointing to a possible impact of competitive pressures from low-wage developing countries in traditional export markets.