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

Author

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  • Davin Chor

    (School of Economics, Singapore Management University)

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) file. It finds 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 significant 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 qualified when factor markets are studied instead of aggregate incomes.

Suggested Citation

  • Davin Chor, 2008. "Skilled and Unskilled Wages in a Globalizing World, 1968-1998," Working Papers 06-2008, Singapore Management University, School of Economics.
    • Handle: RePEc:siu:wpaper:06-2008
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    Cited by:

    1. Harald Fadinger & Karin Mayr, 2014. "Skill-Biased Technological Change, Unemployment, And Brain Drain," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 397-431, April.
    2. Harald Fadinger & Karin Mayr, 2014. "Skill-Biased Technological Change, Unemployment, And Brain Drain," Journal of the European Economic Association, European Economic Association, vol. 12(2), pages 397-431, April.

    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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