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Tetyana Surotseva - Research Summary

London School of Economics

Returns to Country-Specific Human Capital: Evidence from Two Trade Liberalization Episodes

Using two trade liberalization episodes, we examine how bilateral trade affects labour market returns to country-specific human capital. In particular, we examine how NAFTA and China's entry into the WTO affected wages, employment and occupations of workers with Mexican and Chinese backgrounds in the United States. We find that, when the United States engage in trade with Mexico or China, skilled Mexican and Chinese workers experience faster wage growth and occupational upgrading. This effect cannot be explained uniquely by appreciation of the language skills. It is persistent in time and concentrated among US-born individuals.