Wage Divergence and Asymmetries in Unemployment in a Model with Biased Technical Change
AbstractIn this article we present a model with two levels of skills and two classes of goods, one produced with a technology requiring high skills, the other produced with a technology that can be operated by both low and high skilled workers. In this model skill biased technical change causes a drop in the demand for low skilled workers. The model, however, generates two distinct labour market regimes. In one regime we show skill biased technical change causes wage divergence between skilled and unskilled workers. In the alternative regime a reallocation of labour prevents such wage responses. Introducing labour market institutions through a bargaining process endogenises labour supply. This leads to three possible labour market regimes and shows that skill biased technical change always causes wage divergence but wage responses are moderated by higher unemployment of low skilled workers.
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.
Bibliographic InfoPaper provided by Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology in its series Research Memoranda with number 019.
Date of creation: 1999
Date of revision:
Contact details of provider:
Web page: http://www.maastrichtuniversity.nl/web/UMPublications.htm
labour economics ;
Other versions of this item:
- Muysken,J. & Sanders,M. & Zon,A.,Van, 1998. "Wage Divergence and Asymmetries in Unemployment in a Model with Biased Technical Change," Research Memoranda 023, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology.
- Muysken, J. & Zon, A van, 2001. "Wage divergence and asymmetries in unemployment in a Mmodel with biased technical change," Open Access publications from Maastricht University urn:nbn:nl:ui:27-17170, Maastricht University.
- NEP-ALL-1999-05-17 (All new papers)
- NEP-DEV-1999-05-17 (Development)
- NEP-TID-1999-05-17 (Technology & Industrial Dynamics)
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.:
- Soete, Luc & Verspagen, Bart, 1994. "Competing for growth: the dynamics of technology gaps," Open Access publications from Maastricht University urn:nbn:nl:ui:27-6302, Maastricht University.
- Ben-David, Dan & Loewy, Michael B, 1998.
" Free Trade, Growth, and Convergence,"
Journal of Economic Growth,
Springer, vol. 3(2), pages 143-70, June.
- Soete, Luc, 2001. "Electronic commerce and the information highway," Open Access publications from Maastricht University urn:nbn:nl:ui:27-6253, Maastricht University.
- Casas, F R, 1983. "International Trade with Produced Transport Services," Oxford Economic Papers, Oxford University Press, vol. 35(1), pages 89-109, March.
- Casas, Fran?ois R. & Choi, E. Kwan, 1989. "Transport Costs and Immiserizing Growth Under Variable Returns to Scale," Staff General Research Papers 10599, Iowa State University, Department of Economics.
- McMillan, John, 1978. "A Dynamic Analysis of Public Intermediate Goods Supply in Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 665-78, October.
- Newbery, David M, 1987.
"Road User Charges in Britain,"
Royal Economic Society, vol. 98(390), pages 161-76, Supplemen.
- Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
- Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
- Claudia Goldin & Lawrence F. Katz, 1996.
"The Origins of Technology-Skill Complementarity,"
NBER Working Papers
5657, National Bureau of Economic Research, Inc.
- Glomm, Gerhard & Ravikumar, B., 1997. "Productive government expenditures and long-run growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 183-204, January.
- Mainwaring, L, 1986. "The Theory of International Transport Costs with Tradeable Intermediate Goods," Scottish Journal of Political Economy, Scottish Economic Society, vol. 33(2), pages 111-23, May.
- Mankiw, N Gregory & Romer, David & Weil, David N, 1992.
"A Contribution to the Empirics of Economic Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(2), pages 407-37, May.
- Verspagen, Hubertus Henricus Gerardus, 1992. "Uneven growth between interdependent economies: an evolutionary view on technology gaps, trade and growth," Open Access publications from Maastricht University urn:nbn:nl:ui:27-10134, Maastricht University.
- Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-19, December.
- Verspagen, Bart, 1991. "A new empirical approach to catching up or falling behind," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18004, Maastricht University.
- Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charles Bollen).
If references are entirely missing, you can add them using this form.