The paper presents an empirical test of this hypothesis to the Philippines using a factor returns approach proposed by Leamer (1996). Based on the Stopler-Samuelson theory that links output prices with wages, the study considers technological change; export price movements and education (as an indicator of skills) as the key factors contributing to wage variability. An implicit model is developed to estimate the effects of these variables on wage and income inequality in the country across time and different types of industries. This model is applied from 1989 to 1995, a time period that is long enough to allow globalization and trade liberalization to affect both export prices and the consequent returns to factors due to these price changes. Moreover, the sample used in the paper includes the top exporting industries that are believed to have benefited from the present globalization.
