Technological change, relative wages, and unemployment
This paper examines the effect of skill-biased technological change on the structure of wages, the composition of employment and the level of unemployment in a two-sector economy with a heterogenous work force. Efficiency wage considerations and minimum wage legislation lead to labor market segmentation. A technological shock that reduces the demand for unskilled labor and raises the demand for skilled labor in the primary, high-wage sector is shown to increase the relative wage of skilled workers and reduce aggregate employment as well as the employment level of unskilled workers in that sector. The net effect of the shock on the employment level of skilled workers is mitigated by the existence of efficiency factors.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
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.:
- Jacob Mincer, 1991. "Human Capital, Technology, and the Wage Structure: What Do Time Series Show?," NBER Working Papers 3581, National Bureau of Economic Research, Inc.
- George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
- Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
- Eswar S Prasad, 1994. "The Canadian Labor Market; Developments, Prospects, and Policy," IMF Working Papers 94/97, International Monetary Fund.
- Dimitri G Demekas, 1994. "Labor Market Institutions and Flexibility in Italy; A Critical Evaluation and Some International Comparisons," IMF Working Papers 94/30, International Monetary Fund.
- David A. Brauer & Susan Hickok, 1995. "Explaining the growing inequality in wages across skill levels," Economic Policy Review, Federal Reserve Bank of New York, issue Jan, pages 61-75.
- Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
- Alan B. Krueger, 1993.
"How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984–1989,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(1), pages 33-60.
- Alan B. Krueger, 1991. "How Computers Have Changed the Wage Structure: Evidence From Microdata, 1984-1989," NBER Working Papers 3858, National Bureau of Economic Research, Inc.
- Pissarides, Christopher A. & Wadsworth, Jonathan, 1994. "On-the-job search: Some empirical evidence from Britain," European Economic Review, Elsevier, vol. 38(2), pages 385-401, February.
- Chatrerji, Monojit & Sparks, Roger, 1991. "Real wages, productivity, and the cycle: An efficiency wage model," Journal of Macroeconomics, Elsevier, vol. 13(3), pages 495-510.
- Jeremy I. Bulow & Lawrence H. Summers, 1985.
"A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment,"
NBER Working Papers
1666, National Bureau of Economic Research, Inc.
- Bulow, Jeremy I & Summers, Lawrence H, 1986. "A Theory of Dual Labor Markets with Application to Industrial Policy,Discrimination, and Keynesian Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 376-414, July.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:41:y:1997:i:2:p:187-205. See general 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: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.