Product Market Integration, Wage Dispersion and Unemployment
AbstractEven when international product market integration is taking place between fairly similar countries with low labour mobility, it may have important effects for labour markets by increasing the mobility of jobs. This creates both opportunities through exports and threats from imports. Is there any reason why the benefits and costs of product market integration should be unequally distributed across different groups in the labour market? Considering integration as a gradual process lowering trade frictions it is found that there is such a bias in the sense that the gains tend to accrue to the high paid and the loses to the low paid. Product market integration may thus lead to a more inequal distribution of wages and employment, even though there are aggregate gains in terms of higher real incomes and employment.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 279.
Length: 37 pages
Date of creation: Apr 2001
Date of revision:
Publication status: published in: Labour Economics, 2005, 12 (3), 379-406
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
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.:
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Working papers, Massachusetts Institute of Technology (MIT), Department of Economics
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