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| Author: | Davis, D. R. |
| Title: | Technology, unemployment, and relative wages in a global economy |
| Journal: | European Economic Review
1998 : NOV, VOL. 42:9, p. 1613-1633 |
| Index terms: | TRADE UNEMPLOYMENT TECHNOLOGICAL CHANGE PAY MODELS USA |
| Language: | eng |
| Abstract: | Arguably the most important development in recent decades in U.S. 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 U.S. wage inequality, whereas labor market rigidities are often cited as key reason for unemployment in Europe. 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. The results depart significantly but sensibly from what one would expect in a fully flexible wage world. |
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