Fragmentation, globalization and labor markets

Michael Burda and Barbara Dluhosch

No 2001,41, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

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)
JEL-codes: F10 L23 O33 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (4)

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Related works:
Chapter: Fragmentation, Globalisation and Labour Markets (2002)
Working Paper: Fragmentation, Globalization and Labor Markets (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:200141

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