In the debate on globalisation and wage inequality Heckscher-Ohlin, economic geography and services availability theory has featured prominently. However, a neglected mechanism by which globalisation affects labour market outcomes is through the in-creased tradability of producer services. By integrating elements of Heck-scher- Ohlin theory, the economic geography literature and the literature on producer services linkages, we show that the impact of globalisation on the relative wages is a sophisticated combination of the effects that play a key-role in these models. The most important result we find is that the fall in transportation costs of producer services might indeed have caused the sharp increase in wage inequality. (JEL F1, R1)
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number
00C21.