Learning either to apply theories to real world events or to test some theo

Richard Freeman (“Are Your Wages Set in Beijing?” Journal of Economic Perspectives, 1995) surveys
the literature on the effect of trade on real wages for low-skilled workers. Assess the effect of trade
on real wages of low-skilled and high-skilled labor for the United States over the past 20 years. Also
pick two states: Minnesota and Texas, to assess the effect of their individual trade on the wage
within the state.

The research paper should include the following components:
– (a) What question interests you and what is the effect (the dependent variable) you are studying?
– (b) Why is it interesting?
– (c) What is the cause (the independent variable)? What is the relationship between the cause and the
effect, positive or negative? Why? Explain the relationship theoretically. (About 2 pages from a to c).
– (d) How do you measure the cause and the effect? Justify why. What data are there for both the dependent
and independent variables? (About one page)
– (e) Do your data support your expectation of the relationship between the variables? Discuss your results
in detail (i.e., discuss the numeric values of the data you collected).
– (f) What have you learned from your finding? (About 3 pages from e to f).
– (g) Title page, reference page, data appendix.

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