TY - JOUR
T1 - Wage inequality, technology, and trade
AU - Zeira, Joseph
PY - 2007/11
Y1 - 2007/11
N2 - The recent widening of wage inequality has been attributed by some to skill-biased-technical-change and by others to trade liberalization. This paper examines the two explanations within a unified model and also presents a new modeling of skill-biased-technical-change, where skilled workers replace unskilled ones. As a result technology adoption is endogenous and does not occur in all countries. Hence, wages for both types of workers, trade patterns and also factor productivities in all countries are endogenously determined. The model sheds light on the relationship between technology and trade, on the reasons for global productivity differences and on the causes for the recent rise in wage inequality.
AB - The recent widening of wage inequality has been attributed by some to skill-biased-technical-change and by others to trade liberalization. This paper examines the two explanations within a unified model and also presents a new modeling of skill-biased-technical-change, where skilled workers replace unskilled ones. As a result technology adoption is endogenous and does not occur in all countries. Hence, wages for both types of workers, trade patterns and also factor productivities in all countries are endogenously determined. The model sheds light on the relationship between technology and trade, on the reasons for global productivity differences and on the causes for the recent rise in wage inequality.
KW - International trade
KW - Productivity differences
KW - Skill-biased technical change
KW - Wage inequality
UR - http://www.scopus.com/inward/record.url?scp=36049007866&partnerID=8YFLogxK
U2 - 10.1016/j.jet.2006.03.011
DO - 10.1016/j.jet.2006.03.011
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AN - SCOPUS:36049007866
SN - 0022-0531
VL - 137
SP - 79
EP - 103
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -
