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- Title
Trade, technology, and unemployment: the role of endogenous skill formation.
- Authors
Kreickemeier, Udo
- Abstract
This paper analyses trade in an asymmetric 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.
- Subjects
EUROPEANS; PAY equity; EQUAL pay for equal work; WAGE differentials; EFFECT of wages on unemployment; INTERNATIONAL markets; GLOBALIZATION; CAPITAL stock
- Publication
Canadian Journal of Economics, 2009, Vol 42, Issue 2, p639
- ISSN
0008-4085
- Publication type
Article
- DOI
10.1111/j.1540-5982.2009.01522.x