Technology, Unemployment, and Relative Wages in a Global Economy

Donald Davis ()

No 5636, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Arguably the most important development in recent decades in US factor markets is the decline in the relative wage of the unskilled. By contrast, in Europe it is undoubtedly the rise and persistence of unemployment. Technology has been identified as a key reason for the rising US wage inequality, while labor market rigidities are often cited as a key reason for European unemployment. This paper seeks to provide a unified account of these major factor market developments. It models the impact of technical change on relative wages and unemployment in a world in which one country has flexible and the other rigid labor market institutions. The results depart significantly but sensibly from what one would expect in a fully flexible wage world. A few stylized facts help to narrow the field to a few candidates to account for these factor market developments.

JEL-codes: F11 J31 (search for similar items in EconPapers)
Date: 1996-06
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as European Economic Review (November 1998).

Downloads: (external link)
http://www.nber.org/papers/w5636.pdf (application/pdf)

Related works:
Journal Article: Technology, unemployment, and relative wages in a global economy (1998)
Working Paper: Technology, Unemployment and the Relative Wages in a Global Economy (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:5636

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w5636

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().