Abstract The SS theorem based on HO model is suitable for explaining the wage inequality in the context of general trade, and the SS theorem based on intermediate goods trade can be used for the interpretation of wage gap caused by the intermediate goods trade. Thus we need to distinguish general trade and processing trade when we analyze the relationship between foreign trade and wage inequality. We use China’s 29 industries from 2005 to 2009 as samples, and divide them into technology-intensive and non-technology-intensive industries, estimating the effect of the processing trade on wage gap. The result shows that the processing trade of non-technology-intensive industries increases the wage inequality, but the processing trade of technology-intensive industries has no significant effect on wage gap. Moreover, capital intensity, technological change and scale have no influence on wage inequality both for technology-intensive industries and non-technology-intensive industries.
2014, Vol. 31 
