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Globalization, co-operation costs, and wage inequalities

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  • Edward Anderson
  • Paul J. G. Tang
  • Adrian Wood

Abstract

The falling cost of international business travel and communication motivates highly-skilled workers who live in developed countries to spend more of their time co-operating with less-skilled workers in developing countries. This tends to narrow the gap between developed and developing countries in the wages of less-skilled workers, but to widen the wage gap within developed countries between highly-skilled and less-skilled workers. The paper formalizes this mechanism and tests it on data for the United States and developing countries. The two effects on wage inequalities of greater co-operation of highly-skilled workers with workers in developing countries both seem quantitatively important. Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 58 (2006)
Issue (Month): 4 (October)
Pages: 569-595

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Handle: RePEc:oup:oxecpp:v:58:y:2006:i:4:p:569-595

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Cited by:
  1. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," World Bank Economic Review, World Bank Group, vol. 19(1), pages 21-44.
  2. Binelli, Chiara, 2014. "How the wage-education profile got more convex: evidence from Mexico," Discussion Paper Series In Economics And Econometrics 1404, Economics Division, School of Social Sciences, University of Southampton.
  3. Branko Milanovic, 2003. "CAN WE DISCERN THE EFFECT OF GLOBALIZATION ON INCOME DISTRIBUTION? Evidence from Household Budget Surveys," International Trade 0303004, EconWPA.
  4. Mayda, Anna Maria, 2004. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," IZA Discussion Papers 1115, Institute for the Study of Labor (IZA).
  5. Maria Bas, 2008. "Trade, technology adoption and wage inequalities: theory and evidence," LSE Research Online Documents on Economics 28513, London School of Economics and Political Science, LSE Library.
  6. Ucal, Meltem & Bilgin, Mehmet Huseyin, 2009. "Income Inequality and FDI in Turkey: FM-OLS (Phillips-Hansen) Estimation and ARDL Approach to Cointegration," MPRA Paper 48765, University Library of Munich, Germany.
  7. Johannes Fedderke & Yongcheol Shin, 2004. "Trade, Technology and Wage Inequality in the South African Manufacturing Sectors," ESE Discussion Papers 106, Edinburgh School of Economics, University of Edinburgh.
  8. Maria Bas, 2008. "Trade, Technology Adoption and Wage Inequalities: Theory and Evidence," CEP Discussion Papers dp0902, Centre for Economic Performance, LSE.
  9. Mayda, Anna Maria, 2005. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes Towards Immigration," CEPR Discussion Papers 5055, C.E.P.R. Discussion Papers.
  10. Adrian Wood (ODID), . "A practical Heckscher-Ohlin model," QEH Working Papers qehwps170, Queen Elizabeth House, University of Oxford.
  11. Edward Anderson, 2014. "Time differences, communication and trade: longitude matters II," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 150(2), pages 337-369, May.

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