Fragmentation, Globalization and Labor Markets

Michael Burda and Barbara Dluhosch

No 352, CESifo Working Paper Series from CESifo

Abstract: Fragmentation of the value-added-chain is modeled as the reaction of monopolistically competitive firms to the removal of barriers to trade and factor mobility in an integrated trading environment. Since fragmentation requires high-skilled labor, this form of globalization can induce labor market effects similar to those caused by skill-biased technical change. In the short run, it is likely that fragmentation will be accompanied by an increase in high and low-skilled service employment as well as in the skilled wage premia, as observed in OECD countries. These implications can be reversed, however, as new firms enter the market.

Keywords: International trade; organization of production; technology choice; division of labor (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (8)

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Chapter: Fragmentation, Globalisation and Labour Markets (2002)
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