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Trade, technology, and unemployment: the role of endogenous skill formation

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  • Udo Kreickemeier

Abstract

This paper analyses trade in an asymmetric 2 × 2 × 2 world, where the two countries (‘Europe’ and ‘America’) differ in their preferences towards wage inequality. Fair wage considerations compress wage differentials in both countries. European workers are more averse to wage inequality, and Europe is characterized by lower wage differentials and higher unemployment. Allowing for endogenous skill formation, the effects of a globalization shock, global technological change, and a change in the educational capital stock on skill premia and employment levels are derived. In contrast to a model with exogenous factor supplies, international wage and unemployment differentials are affected by global shocks. Ce texte analyse le commerce dans un monde 2 × 2 × 2 où les deux pays (Europe et Amérique) diffèrent dans leurs préférences quant à l'inégalité de salaires. Les considérations de salaires équitables compressent les différentiels de salaires entre les pays. Les travailleurs européens ont une plus grande aversion pour l'inégalité de salaires, et l'Europe est caractérisée par des différentiels de salaires plus bas et un taux de chômage plus élevé. En postulant qu'il y a développement endogène des habiletés, on dérive les effets d'un choc de globalisation, d'un changement technologique global, et d'un changement dans le stock de capital éducationnel sur les primes aux habiletés et sur les niveaux d'emploi. Contrairement à ce qui se passe dans un modèle où l'offre de facteurs est exogène, les différentiels internationaux entre niveaux de salaires et de chômage sont affectés par les chocs globaux.

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  • Udo Kreickemeier, 2009. "Trade, technology, and unemployment: the role of endogenous skill formation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(2), pages 639-664, May.
    • Handle: RePEc:wly:canjec:v:42:y:2009:i:2:p:639-664
    DOI: 10.1111/j.1540-5982.2009.01522.x
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    2. Egger, Hartmut & Fischer, Christian, 2020. "Increasing resistance to globalization: The role of trade in tasks," European Economic Review, Elsevier, vol. 126(C).
    3. Sebastian Benz & Wilhelm Kohler, 2014. "Managerial versus Production Wages: Offshoring, Country Size, and Endowments," Canadian Journal of Economics, Canadian Economics Association, vol. 47(1), pages 250-271, February.
    4. Rossana Patrón, 2012. "Short-term specificity and training: Key issues for economic restructuring," Documentos de Trabajo (working papers) 0212, Department of Economics - dECON.
    5. Hartmut Egger & Peter Egger & Josef Falkinger & Volker Grossmann, 2010. "The Impact of Capital Market Integration on Educational Choice and the Consequences for Economic Growth," The World Economy, Wiley Blackwell, vol. 33(10), pages 1241-1268, October.
    6. Falvey, Rod & Greenaway, David & Silva, Joana, 2010. "Trade liberalisation and human capital adjustment," Journal of International Economics, Elsevier, vol. 81(2), pages 230-239, July.
    7. Rossana Patron, 2013. "Recovery not fast enough? Notes on speeding up," Discussion Papers 13/06, University of Nottingham, School of Economics.
    8. Yasuyuki Sugiyama & Muneyuki Saito, 2016. "Environmental Goods and Measures for Their Promotion: An Analysis Using a Fair Wage Model," Pacific Economic Review, Wiley Blackwell, vol. 21(5), pages 581-602, December.
    9. Greenland, Andrew & Lopresti, John, 2016. "Import exposure and human capital adjustment: Evidence from the U.S," Journal of International Economics, Elsevier, vol. 100(C), pages 50-60.

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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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