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International Trade and the Skill Structure of Wages and Employment in West Germany / Außenhandel und die Qualifikationsstruktur von Löhnen und Beschäftigung in Westdeutschland

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  • Fitzenberger Bernd

    () (Ph.D., Fakultät Wirtschaftswissenschaften, Technische Universität Dresden, 01062 Dresden)

Abstract

Building on a Heckscher-Ohlin-Samuelson framework with factor price rigidities, this paper provides an empirical analysis of the relationship between trade, technical progress, and the labor market in West Germany for the period from 1970 until 1990. The analysis builds on relative product prices as the major transmission channel of trade effects on the labor market and allows for three skill types of labor. The major findings are that, relative to skilled labor, wages were increasing disproportionately both for low- and high-skilled labor whereas employment trends were favoring higher skill levels monotonically. Import competition as well as total factor productivity were increasing disproportionately in those industries using low- or high-skilled labor intensively. These results are consistent with trade effects dominating for low-skilled labor and technology effects for high-skilled labor while wage bargaining institutions were holding up relative wages of low-skilled labor. The combined effect accounts for the disproportionate increase of unemployment for low-skilled workers.

Suggested Citation

  • Fitzenberger Bernd, 1999. "International Trade and the Skill Structure of Wages and Employment in West Germany / Außenhandel und die Qualifikationsstruktur von Löhnen und Beschäftigung in Westdeutschland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 219(1-2), pages 67-89, February.
  • Handle: RePEc:jns:jbstat:v:219:y:1999:i:1-2:p:67-89
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    Citations

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    Cited by:

    1. Ziesemer, Thomas, 2001. "ICT as Technical Change in the Matching and Production Functions of a Pissarides-Dixit-Stiglitz model," Research Memorandum 024, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. John Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2008. "The Demand for Labor: An Analysis Using Matched Employer–Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," Journal of Labor Research, Springer, vol. 29(2), pages 114-137, June.
    3. Moritz, Michael & Gröger, Margit, 2007. "The German-Czech border region after the fall of the Iron Curtain: Effects on the labour market : an empirical study using the IAB Employment Sample (IABS)," IAB Discussion Paper 200701, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Ingo Geishecker & Holger Görg, 2003. "Winners and Losers: Fragmentation, Trade and Wages Revisited," Discussion Papers of DIW Berlin 385, DIW Berlin, German Institute for Economic Research.
    5. Carsten Ochsen, 2006. "Zukunft der Arbeit und Arbeit der Zukunft in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 173-193, May.
    6. Michael Moritz, 2011. "The Impact of Czech Commuters on the German Labour Market," Prague Economic Papers, University of Economics, Prague, vol. 2011(1), pages 40-58.
    7. Carsten Ochsen & Heinz Welsch, 2005. "Technology, trade, and income distribution in West Germany: A factor-share analysis, 1976-1994," Journal of Applied Economics, Universidad del CEMA, vol. 8, pages 321-345, November.
    8. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    9. Peter Huber & Yvonne Wolfmayr-Schnitzer, 2000. "Foreign Trade and Wages," WIFO Monatsberichte (monthly reports), WIFO, vol. 73(3), pages 197-210, March.
    10. Marcel Garz & Artur Tarassow, 2011. "Does an expanding low-pay sector decrease structural unemployment? Evidence from Germany," Macroeconomics and Finance Series 201104, Hamburg University, Department Wirtschaft und Politik.
    11. Aretz, Bodo & Busl, Claudia & Gürtzgen, Nicole & Hogrefe, Jan & Kappler, Marcus & Steffes, Susanne & Westerheide, Peter, 2009. "Endbericht zum Forschungsauftrag fe 13/08: "Ursachenanalyse der Verschiebung in der funktionalen Einkommensverteilung in Deutschland" (Aktenzeichen I A 3 - Vw 3170/08/10035)," ZEW Expertises, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 110510.

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