Relative Wages and Trade-Induced Changes in Technology
AbstractWe develop a model where trade liberalization leads to skill-biased technological change, which in turn raises the relative return to skilled labour. As firms get access to a larger market, they have incentives to choose a more skill-intensive technology because a lowering of variable costs requires additional use of skilled labour. This way, we establish a link between trade, technology and relative returns to skilled and unskilled labour. Moreover, we show that as market integration continues and trade costs fall below a certain threshold, the relative return to skilled labour may fall.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2677.
Date of creation: Jan 2001
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Ekholm, Karolina & Midelfart, Karen Helene, 2005. "Relative wages and trade-induced changes in technology," European Economic Review, Elsevier, vol. 49(6), pages 1637-1663, August.
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul, Catherine J Morrison & Siegel, Donald S, 2001. " The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(2), pages 241-64, June.
- Haskel, Jonathan & Slaughter, Matthew, 1999.
"Trade, Technology and UK Wage Inequality,"
CEPR Discussion Papers
2091, C.E.P.R. Discussion Papers.
- Daron Acemoglu, 2003.
"Patterns of Skill Premia,"
Review of Economic Studies,
Wiley Blackwell, vol. 70(2), pages 199-230, 04.
- Desjonqueres, Thibaut & Machin, Stephen & Van Reenen, John, 1999. " Another Nail in the Coffin? Or Can the Trade Based Explanation of Changing Skill Structures Be Resurrected?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 533-54, December.
- Dinopoulos, Elias & Segerstrom, Paul, 1996.
"A Schumpeterian Model of Protection and Relative Wages,"
Working Paper Series
471, Research Institute of Industrial Economics.
- Paul Segerstrom & Elias Dinopoulos, 1999. "A Schumpeterian Model of Protection and Relative Wages," American Economic Review, American Economic Association, vol. 89(3), pages 450-472, June.
- Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
- Markusen, James R. & Venables, Anthony J., 1998.
"Multinational firms and the new trade theory,"
Journal of International Economics,
Elsevier, vol. 46(2), pages 183-203, December.
- Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, vol. 108(450), pages 1463-82, September.
- Burda, Michael C & Dluhosch, Barbara, 2002.
"Cost Competition, Fragmentation, and Globalization,"
Review of International Economics,
Wiley Blackwell, vol. 10(3), pages 424-41, August.
- Barbara Dluhosch & Michael Burda, 2000. "Cost Competition, Fragmentation and Globalization," CESifo Working Paper Series 393, CESifo Group Munich.
- Burda, Michael C. & Dluhosch, Barbara, 2001. "Cost competition, fragmentation and globalization," SFB 373 Discussion Papers 2001,40, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Neary, J Peter, 2002.
"Foreign Competition and Wage Inequality,"
Review of International Economics,
Wiley Blackwell, vol. 10(4), pages 680-93, November.
- Burda, Michael C & Dluhosch, Barbara, 1998. "Globalization and European Labour Markets," CEPR Discussion Papers 1992, C.E.P.R. Discussion Papers.
- J. Peter Neary, 2000.
"Competition, Trade and Wages,"
200020, School Of Economics, University College Dublin.
- Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
- Falvey, Rod & Reed, Geoff, 2000. "Trade Liberalization and Technology Choice," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 409-19, August.
- Markusen, James R & Venables, Anthony J, 1997. "The Role of Multinational Firms in the Wage-Gap Debate," Review of International Economics, Wiley Blackwell, vol. 5(4), pages 435-51, November.
- Greenaway, David & Hine, Robert C. & Wright, Peter, 1999. "An empirical assessment of the impact of trade on employment in the United Kingdom," European Journal of Political Economy, Elsevier, vol. 15(3), pages 485-500, September.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.