The recent widening of wage inequality has been attributed by some to skill-biased-technical-change and by others to trade liberalization. This paper examines the two explanations within a unified model and also presents a new modeling of skill-biased-technical-change, where skilled workers replace unskilled ones. As a result technology adoption is endogenous and does not occur in all countries. Hence, wages for both types of workers, trade patterns and also factor productivities in all countries are endogenously determined. The model sheds light on the relationship between technology and trade, on the reasons for global productivity differences and on the causes for the recent rise in wage inequality.

Wage Inequality, Technology and Trade / Zeira, Joseph. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - 137:1(2007), pp. 79-103. [10.1016/j.jet.2006.03.011]

Wage Inequality, Technology and Trade

ZEIRA, JOSEPH
2007

Abstract

The recent widening of wage inequality has been attributed by some to skill-biased-technical-change and by others to trade liberalization. This paper examines the two explanations within a unified model and also presents a new modeling of skill-biased-technical-change, where skilled workers replace unskilled ones. As a result technology adoption is endogenous and does not occur in all countries. Hence, wages for both types of workers, trade patterns and also factor productivities in all countries are endogenously determined. The model sheds light on the relationship between technology and trade, on the reasons for global productivity differences and on the causes for the recent rise in wage inequality.
Wage Inequality, Technology and Trade / Zeira, Joseph. - In: JOURNAL OF ECONOMIC THEORY. - ISSN 0022-0531. - 137:1(2007), pp. 79-103. [10.1016/j.jet.2006.03.011]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/5480
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