Labor market adjustments to globalization: unemployment versus relative wages
AbstractThe aim of this paper is two-fold. First, we analyze the role of wage rigidities in labor market adjustments to international trade and biased technological progress in a small open economy. We introduce efficiency wages into a neoclassical trade model and show that changes in relative wages are independent of wage rigidities. Second, we examine the impact of capital market integration on relative wages and unemployment and find that wage inequality will rise (fall) and unemployment will fall (rise) when capital is being imported (exported).
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Bibliographic InfoArticle provided by Elsevier in its journal The North American Journal of Economics and Finance.
Volume (Year): 14 (2003)
Issue (Month): 2 (August)
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Web page: http://www.elsevier.com/locate/inca/620163
Other versions of this item:
- Eckel, Carsten, 2003. "Labor market adjustments to globalization: Unemployment versus relative wages," Munich Reprints in Economics 20538, University of Munich, Department of Economics.
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