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Globalization and the Inequality-Unemployment Tradeoff

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  • Jo�l Hellier
  • Nathalie Chusseau

Abstract

Over the last 20 years, advanced economies have experienced an "unemployment versus inequality" tradeoff that is critically uneven across countries. To explain this, we propose an extended HOS model in which: the factors are skilled and unskilled labor; there is a continuum of goods; the world comprises two North countries (one egalitarian and one nonegalitarian) and the South; there is no factor price equalization; globalization consists in the South cornering a growing share of world production. In the North, globalization entails an inequality-unemployment tradeoff and the adjustment to globalization is more painful for the country that was initially inequality-oriented. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 5 (November)
Pages: 1028-1043

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Handle: RePEc:bla:reviec:v:18:y:2010:i:5:p:1028-1043

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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Cited by:
  1. Thomas Beissinger & Nathalie Chusseau & Joel Hellier, 2014. "Offshoring, employment, labour market reform and inequality: Modelling the German experience," Working Papers 330, ECINEQ, Society for the Study of Economic Inequality.
  2. Marika Karanassou & Hector Sala, 2011. "Inequality and Employment Sensitivities to the Falling Labour Share," Working Papers 680, Queen Mary, University of London, School of Economics and Finance.
  3. Nathalie Chusseau & Joel Hellier, 2012. "Inequality in emerging countries," Working Papers 256, ECINEQ, Society for the Study of Economic Inequality.
  4. Nathalie Chusseau & Joël Hellier, 2012. "Globalization and Inequality: Where do we stand?," Working Papers 279, ECINEQ, Society for the Study of Economic Inequality.
  5. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.
  6. Joël Hellier, 2012. "The North-South HOS Model, inequality and globalization," Working Papers 244, ECINEQ, Society for the Study of Economic Inequality.
  7. Joël Hellier, 2012. "North-South Globalization and Inequality," Working Papers 273, ECINEQ, Society for the Study of Economic Inequality.

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