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Skilled and Unskilled Wages in a Globalizing World, 1968-1998

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  • Davin Chor

    (SMU)

Abstract

This paper constructs a data set on purchasing-power-parity (PPP) adjusted skilled and unskilled wages in 139 countries for the period 1968-1998, based on the International Labor Organization's (ILO) annual October Inquiry and the Freeman and Oostendorp (2000) Occupational Wages Around the World (OWW) le. It nds strong evidence for the existence of well-integrated markets for skilled and unskilled labor, justifying the approach of constructing a skilled wage series and an unskilled wage series. Several signicant results emerged from an analysis of a representative subset of 67 countries which provided unbroken coverage for 1970-1994 : (i) there is striking evidence of unconditional convergence in the skilled-unskilled wage ratio worldwide; (ii) this relative wage convergence was especially strong within a "club" of open economies, suggesting that Heckscher-Ohlin-Sameulson mechanisms might be at work; and (iii) there is a relatively weak pattern of convergence in unskilled real wages, implying that the claim of "Divergence, Big Time" (Pritchett 1997) has to be qualied when factor markets are studied instead of aggregate incomes.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Labor Economics Working Papers with number 22073.

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Date of creation: Jan 2008
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Handle: RePEc:eab:laborw:22073

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Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
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Keywords: Wages; purchasing-power-parity;

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Cited by:
  1. Harald Fadinger & Karin Mayr, 2011. "Skill-biased technological change, unemployment and brain drain," Vienna Economics Papers 1108, University of Vienna, Department of Economics.

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