Foreign Competition and Wage Inequality

J. Peter Neary ()

No 200102, Working Papers from School Of Economics, University College Dublin

Abstract: I argue that increased foreign competition can affect technical choice and skill differentials even when actual imports do not rise significantly. I present a model of General Oligopolistic Equilibrium ("GOLE") in which a reduction in import barriers (whether technological or policy-imposed) encourages more strategic investment by incumbent firms. The predictions accord with many of the stylised facts - higher skill premia; higher ratios of skilled to unskilled workers employed in all sectors and throughout the economy; little change in import volumes or prices; and rapid technological progress with rather little change in total factor productivity.

Keywords: General Oligopolistic Equilibrium ("GOLE"); skill-biased technical progress; skill premia; strategic investment; trade and wages (search for similar items in EconPapers)
JEL-codes: F16 J31 F12 (search for similar items in EconPapers)
Date: 2001-01-19
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http://www.ucd.ie/economics/research/papers/2001/WP01.02.pdf First version, 2001 (application/pdf)

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Working Paper: Foreign Competition and Wage Inequality (2002)
Journal Article: Foreign Competition and Wage Inequality (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:ucn:wpaper:200102

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