Trade, technical change, and labour market adjustment

Bernhard Heitger and Jürgen Stehn

Open Access Publications from Kiel Institute for the World Economy from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The paper empirically examines three possible reasons for the high and rising unemployment of low-skilled employees in Germany: (i) an upsurge in interindustry trade, (ii) a skill-biased technical change, and (iii) a failure of labour market adjustment. The empirical analyses indicate that an exogenous wage-setting process as well as a bundle of factors, including a skill-biased technical and structural change, have contributed to the decline in relative demand for low-skilled employees in Germany. Thus, economic policy in Germany should focus on improving the employability of workers in the lower segment of the labour market and on raising the adjustment flexibility, above all the flexibility of the wage structure, of the German labour market.

JEL-codes: F11 J31 O30 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (6)

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Journal Article: Trade, Technical Change, and Labour Market Adjustment (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkie:3101

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