Heterogeneous trade costs and wage inequality: A model of two globalizations

► Develop model to study the effects of two globalizations and their interdependencies. ► Two globalizations: L(C) increased trade in low (middle) skill goods in 1980s (90s). ► North: wage inequality rises in L-globalization, wage polarization emerges in C. ► Interdependence: wage polarization is delayed by L-globalization. ► Southern asymmetric participation in C causes discontinuous pattern specialization.